Sunday, October 11, 2009

Economies of scale



Economies of scale - effects of scale. Another words, it is everything that occurs after large (really large!!!) projects. In our case, economies of scale are consequences after building large agriculture complex for growing tomatoes.

I think that the result of growing tomatoes in this case would be diseconomies of scale, because the company will need a lot of stuff for looking after such a big complex, also they will more managers to watch after production. So  price will probably grew, because this production (point) will be upper the  technical  optimum on the long run average curve.

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