New Click here to Enroll for SIDBI MSME Expert Class by ex-GM, SBI on Nov 24

    Register

    Question

    In which of the following case , the production cost curves shifts downward?

    A Increase in labor productivity Correct Answer Incorrect Answer
    B Increasing returns to scale Correct Answer Incorrect Answer
    C Internal economies Correct Answer Incorrect Answer
    D External diseconomies Correct Answer Incorrect Answer

    Solution

    An economy of scale is a microeconomic term that refers to factors driving production costs down while increasing the volume of output. There are two types of economies of scale: internal and external economies of scale. Internal economies of scale are firm-specific—or caused internally—while external economies of scale occur based on larger changes outside the firm. Both result in declining marginal costs of production, yet the net effect is the same

    Practice Next