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economies of scale

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assembly line

assembly line  

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Overview Page
A device moving a good being produced, for example a car, past a sequence of workers or machines. As it passes each work-station, a particular task is performed. Tasks may include adding components, ...
barriers to entry

barriers to entry  

Factors that prevent competitors from entering a particular market. These factors may be innocent, e.g. an absolute cost advantage on the part of the firm that dominates the market, or deliberate, ...
contestable market

contestable market  

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A market that has very low barriers to entry and exit; in a perfectly contestable market entry and exit are costless. In such a market potential as well as actual competition is a constraint on what ...
cost minimization

cost minimization  

The behavioural assumption that an individual or firm will seek to purchase a given amount of goods or inputs at the least cost, other things being equal. By making certain assumptions, there will ...
diagonal integration

diagonal integration  

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Overview Page
Subject:
Media studies
Strategic acquisitions, alliances, and information partnerships between companies in order to improve access to consumers and to achieve economies of scale and scope. Characterized by ...
diseconomies

diseconomies  

Financial drawbacks. Diseconomies of scale may occur when an enterprise becomes too large, sites become constricted, the flow of goods is congested, or the workforce is alienated. See Barcena-Ruiz ...
economies of scale

economies of scale   Reference library

Dictionary of the Social Sciences

Reference type:
Subject Reference
Current Version:
2002
Subject:
Social sciences
Length:
142 words

A situation in which the average cost of production decreases as production increases. Large fixed costs, such as factories, are

economies of scale

economies of scale   Reference library

The Handbook of International Financial Terms

Reference type:
Subject Reference
Current Version:
2005

The reduction in average costs of undertaking an activity from increased size or level of production.

Economies of Scale

Economies of Scale   Reference library

The Oxford Encyclopedia of Economic History

Reference type:
Subject Reference
Current Version:
2005
Subject:
Social sciences, Economics
Length:
1,294 words

A technology may be characterized as exhibiting economies of scale, or increasing returns to scale, if a proportionate increase in

gains from trade

gains from trade  

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Overview Page
The improvement in welfare possible as the result of countries being able to trade with one another, as compared with a position of autarchy. Gains from trade arise from two principal sources. One is ...
globalization strategy

globalization strategy  

A marketing strategy that is standardized for use throughout the world. The strategy assumes that the behaviour of many consumers throughout the world has become very similar. It assumes that members ...
horizontal integration

horizontal integration  

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Overview Page
The combination of two or more companies in the same business, carrying out the same process or production, usually to reduce competition and gain economies of scale. Compare vertical integration.
import substitution

import substitution  

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Overview Page
A strategy for the industrialization of less developed countries (LDCs), of concentrating initially on replacing imports by domestically produced substitutes. This has the advantage that it is ...
increasing returns to scale

increasing returns to scale  

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Overview Page
In a productive process, average productivity increasing with output. This means that increasing all inputs in the same proportion results in a more than proportional increase in output. Formally, ...
indivisibility

indivisibility  

Reference type:
Overview Page
Subject:
Law
1 In a productive process, the existence of a minimum scale at which any technique can operate. This applies to all productive techniques. In some cases the minimum scale is so small that it has no ...
industrial organization

industrial organization  

A field of economics that studies market structure and the strategic behaviour of firms, with the focus on imperfect competition. It includes the factors determining which activities are coordinated ...
learning by doing

learning by doing  

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A term applied to describe an increase in a worker's productivity through practice. This concept is used in some endogenous growth models to explain increasing returns to human capital. Except in the ...
mass customization

mass customization  

The ability to create tailored marketing messages or products for individual customers, or a group of similar customers (a bespoke service), while retaining the economies of scale and the capacity of ...
merger

merger  

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Overview Page
A combination of two or more firms into a single new firm. This takes over all the assets and liabilities of the merging firms; shares in the new firm are divided between the shareholders of the ...
minimum efficient scale of production

minimum efficient scale of production  

The smallest possible size of a factory compatible with profitable production, below which economies of scale don't apply. Mes. can be defined in terms of production, or of employment. The turnover ...

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