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INTERNAL ECONOMICS OF
SCALE
NAME - Khusbu
singh
PRN- DM17D19
PGDM IV
• If large quantity of raw material is purchased they get
preference by the firm, they gets some kind of
discount.
• Better bargaining power, better discount given by the
supplier average cost goes down.
• New machines can be installed in place of old
machines.
• Production increase because of improve
technology.
It is because of good credit rating, cheap loan average
cost goes down.
It can overcome any financial crisis by using the reserve
funds.
Commerci
al
economic
s
Technical
economic
s
Financial
economic
s
• Hiring skilled labor in all branch of production
so that quality and quantity should be
improved.
• It is because of the good manager output goes
up.
• Marketing cost shared by high input average cost
falls.
• By increasing the quantity its per unit cost will
decrease that will decrease the cost of
advertisement.
• Labor become more productive average cost
fall
• Increasing the efficiency by hiring experienced
labor or upskilling present labor
Managerial
economics
Labor
economics
Marketing
economic
s
WHAT IS INTERNAL ECONOMICS OF
SCALE
If the per unit cost (Average cost) goes on falling
due to any reason inside the organization/factory,
it is referred to as internal economics of scale
THANK
YOU

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Independent Study - College of Wooster Research (2023-2024)
 

Eco ppt

  • 1. INTERNAL ECONOMICS OF SCALE NAME - Khusbu singh PRN- DM17D19 PGDM IV
  • 2. • If large quantity of raw material is purchased they get preference by the firm, they gets some kind of discount. • Better bargaining power, better discount given by the supplier average cost goes down. • New machines can be installed in place of old machines. • Production increase because of improve technology. It is because of good credit rating, cheap loan average cost goes down. It can overcome any financial crisis by using the reserve funds. Commerci al economic s Technical economic s Financial economic s
  • 3. • Hiring skilled labor in all branch of production so that quality and quantity should be improved. • It is because of the good manager output goes up. • Marketing cost shared by high input average cost falls. • By increasing the quantity its per unit cost will decrease that will decrease the cost of advertisement. • Labor become more productive average cost fall • Increasing the efficiency by hiring experienced labor or upskilling present labor Managerial economics Labor economics Marketing economic s
  • 4. WHAT IS INTERNAL ECONOMICS OF SCALE If the per unit cost (Average cost) goes on falling due to any reason inside the organization/factory, it is referred to as internal economics of scale