Costs in the long run:Costs in the long run:
economies of scaleeconomies of scale
concept of the
Understand the different
sources of economies of
Explain what is
What have these in common?
Colour printers for
Keyboards for less
A mouse for the same
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CD and DVD players
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The benefits of mass production
Firms that are able to increase their SCALE of
production are able to benefit from lower UNIT
COSTS in the long run.
The benefits of a larger scale of production are
known as ECONOMIES OF SCALE
Long run average cost falls as the scale of
The impact of increasing scale
The long run average cost curve
Economies of scale Diseconomies of scale
Internal economies of scale
Use your textbooks and other
resources to describe each of
the internal economies of scale
on the last slide.
The following quiz is designed to
help you to assess whether you
have understood the terms and
concepts so far.
Review your notes outside lessons
if the quiz shows gaps in your
Read the information on the car
industry and answer the