What is mutual dependency?
Kotter (2010) defines mutual dependence as “a state in which two or more parties have power over each other, because they are, to some degree, dependent on each other” (p. 11).
What is the role of mutual dependence in an oligopoly market?
Oligopoly arises when a small number of large firms have all or most of the sales in an industry. Oligopolies are typically characterized by mutual interdependence where various decisions such as output, price, advertising, and so on, depend on the decisions of the other firm(s).
How does specialization lead to economies of scale?
Specialization Leads to Economies of Scale As labor is divided amongst workers, workers are able to focus on a few or even one task. The more they focus on one task, the more efficient they become at this task, which means that less time and less money is involved in producing a good.
How does specialization benefit an economy?
Specialization can increase the productivity of and provide a comparative advantage for a firm or economy. Microeconomic specialization involves the individual actors and economic components, and macroeconomic specialization involves the broad advantage an economy holds in production.
What is mutual dependence for essential well being called?
1. symbiosis – the relation between two different species of organisms that are interdependent; each gains benefits from the other. mutualism.
How do economies of scale contribute to the development of an oligopoly?
How do economies of scale contribute to the development of an oligopoly? Economies of scale make small-scale producers inefficient. the manner in which one oligopolist reacts to a change in price made by another oligopolist in the industry.
How can economies of scale be improved?
Companies can achieve economies of scale by increasing production and lowering costs. This happens because costs are spread over a larger number of goods. Costs can be both fixed and variable.
What are the benefits of large scale profession?
(a) Advantages of Large Scale Production:
- Internal Economies: Internal economies arise within the firm because of the expansion of the size of a particular firm.
- External Economies:
- Division of Labour:
- Use of machines:
- More Production:
- Economies of Organisation:
- Low Cost of Production:
- Cheap and Easy Loans:
What Makes A and B mutually exclusive?
A and B are mutually exclusive events if they cannot occur at the same time. This means that A and B do not share any outcomes and P(A AND B) = 0.
What does economies of scale mean in economics?
Economies of scale refers to the situation where, as the quantity of output goes up, the cost per unit goes down. This is the idea behind “warehouse stores” like Costco or Walmart. In everyday language: a larger factory can produce at a lower average cost than a smaller factory.
What is the difference between internal and external economies of scale?
Internal economies are caused by factors within a single company while external factors affect the entire industry. The size of the business generally matters when it comes to economies of scale. The larger the business, the more the cost savings. Economies of scale can be both internal and external.
What is the relationship between economies of scale and diminishing returns?
The concept of economies of scale, where average costs decline as production expands, might seem to conflict with the idea of diminishing marginal returns, where marginal costs rise as production expands.
How do economies of scale affect per unit costs?
There are several reasons why economies of scale give rise to lower per-unit costs. First, specialization of labor and more integrated technology boost production volumes. Second, lower per-unit costs can come from bulk orders from suppliers, larger advertising buys, or lower cost of capital.