Companies can achieve economies of scale by expanding into international markets because of production costs increase....

Companies can achieve economies of scale by expanding into international markets because of production costs increase. true or false

Solutions

Expert Solution

Companies can achieve economies of scale by expanding into international markets because of production costs increase.

The above given statement is: FALSE

Explanation: Let us first discuss of the term "economies of scale" and what does that term indicates. The economies of scale is the concept that explains about the cost advantage in the production. When the over all sale increases then the result will be that the cost of production per unit will decrease. Here in the above given statement the companies can't achieve the economies of scale by expanding into international market because of the production cost increase. The companies can attain the economies of scale by means of reduction in the production cost. To achieve the economies of scale the companies must increase the production and reduce the costs. But the given statement contradicts the reality and hence the given statement is false.

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

1.Companies can experience Economies of Scale and get better at production as they increase output quantity....

1.Companies can experience Economies of Scale and get better at production as they increase output quantity. Which of the following is not a reason for this effect? Group of answer choices: a.Labor Specialization b. Managerial Specialization c. Efficient Capital Implementation d. Bureaucratic Decision Making 2. Smartphone flashlight apps are readily available from a variety of different software companies and they all perform the same function. Which market model would these be an approximate example of? Group of answer choices a...

Economies of scale are important because they mean that as firms increase in size, they can...

Economies of scale are important because they mean that as firms increase in size, they can become more efficient. What is meant by product differentiation and intra-industry trade? Consider the intra-industry trade model under the assumptions of monopolistic competition. (See the class notes) a. Draw two graphs showing long-run equilibrium of a firm under autarky, and the long- run equilibrium of a firm with trade. b. How do the countries gain from the intra-industry trade?

Can Tesla Achieve Economies of Scale and Keep its Promise?

QUESTION TWO [20] “When economies of scale are substantial, larger firms can achieve lower average costs...

QUESTION TWO [20] “When economies of scale are substantial, larger firms can achieve lower average costs of production or distribution than their smaller rivals, giving the larger firms a permanent competitive advantage in some industries. By the same token, when diseconomies of scale are operative, larger firms can suffer a greater loss when compared to their smaller rivals. Smaller firms are then able to translate the benefits of small size into a distinct competitive advantage.” In terms of the above...

True or False i. The presence of economies of scale make it is easier to achieve...

True or False i. The presence of economies of scale make it is easier to achieve expansions of RGDP through increasing economic resources. j. Once it joined the Euro, Greece lost the use of both Monetary Policy and Exchange Rate changes to deal with problems in its economy. k. When a country in financial difficulty has obtained a bailout program from the IMF, it receives funds regardless of its economic performance or policies. l. PPP adjustment to converting a non-US...

Burberry Economies of scale-proportionate saving in costs gained by an increased level of production.....Is it easy...

Burberry Economies of scale-proportionate saving in costs gained by an increased level of production.....Is it easy to do what your company does? Why? What are the fixed assets? How much does it cost to run the business? Is it easy for another company to do the same? Brand loyalty-tendency of consumers sticking with the same brand of products....Does the company have enough brand loyalty of other competitors were to enter the market?

Between "Diminishing Returns and the Production Function" and Economies of Scale and Long-Run Costs", Which two...

Between "Diminishing Returns and the Production Function" and Economies of Scale and Long-Run Costs", Which two economics concepts of production theory can be used by business owners to decide on key issues affecting their firms? How these two concepts are related?

Economies of scale is one of the causes of international trade. Expound on what it is....

Economies of scale is one of the causes of international trade. Expound on what it is. Furthermore, explicate how the evidence supports this theory of trade. Apply the theory to one case, as a minimum.

Is there any relationship between returns to scale and economies of scale? Assume a production function...

Is there any relationship between returns to scale and economies of scale? Assume a production function q = 100(K^0.7*L^0.3), where K is capital and L is labor. Derive the marginal product of labor and the marginal product of capital. Show that the marginal product of labor is decreasing (hint: beginning with K = 2, and L = 50)

Describe and define the economies and diseconomies of scale for both companies in relation to the...

Describe and define the economies and diseconomies of scale for both companies in relation to the resources they use in their factors of production (Land, Labor, Entrepreneurial Talent, & Capital). What types of Externalities to both firms face? How are they alike? How are they different? 3. Provide two examples of price discrimination that the firms above engage in and how that specific action would help the firms sales.

Subjects