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LC Econ Producers
Term | Definition |
---|---|
External economies of scale | The factors that lower the average cost of production as the industry grows in size |
External diseconomies of scale | The factors that cause average cost of production to rise as output expands |
Firm | The individual unit of business that produces output and sells its product in the market. |
Footloose industries | Industries where firms can easily locate anywhere. |
Industry | The group of firms that produce the entire output of a particular good or service. |
Internal diseconomies of scale | The factors that cause a firm's average cost of production to rise once the firm reaches a certain size. |
Internal economies of scale | The factors that lower a firm's average cost of production as the firm expands in size. |
Market-oriented industries | Industries where closeness to the market is more important than access to raw materials. Also called weight-gaining industries. |
Optimum size of a firm | The most efficient size for a firm |
Supply-oriented industries | Industries where access to raw materials is more important than closeness to the market. Also called weight-losing industries. |