ECON 308 Study Guide - Final Guide: Frosted Flakes, Acura, 5 News
Document Summary
Economies of scale and scope, economies scale is when you should increase your output level, your average costs of production decline. Ex: ge has a conveyor belt bringing the products down to the assembly line. The conveyor belt is fixed cost because it brings different products to be assembled by the workers: economies scope is when you produce 2 or more products together is cheaper than producing them separately. Ex: mcdonald"s using the same grill to produce different types of burgers: product differentiation: quality, warranty, brand name it allows you to set the market price. Ex: lexus has different prices and is more expensive than acura because of the quality and the brand name. And they both offer 100,000 miles on the car engine: government regulation. Ex: patterns, when you invented a new stuff you can file for a pattern, which will last about 20 or so years.
