Capital intensive operations, Microeconomics

Assignment Help:

Where minimum efficient scale is very huge for capital intensive operations, it may be more cost effective to allow one company to spread its fixed costs over a very huge number of consumers, rather than have various competing firms suffer the fixed costs of a minimum efficient scale and have to share a customer base.   There are various industries that are very capital intensive and need large initial investments to operate.  These types of firms are frequently natural monopolies.  Railroads, electric generating companies, and air lines needs tens of millions of dollars in fixed costs.

 


Related Discussions:- Capital intensive operations

Production, explain the concept economies/diseconomies of scale and minimum...

explain the concept economies/diseconomies of scale and minimum efficient scale

Explain fiscal policy, Fiscal Policy Fiscal policy refers to the manage...

Fiscal Policy Fiscal policy refers to the management of government spending and tax policies to influence total desired spending so as to achieve the desired level of economic

Example of consumer surplus, Example: The Value of Clean Air Air is fre...

Example: The Value of Clean Air Air is free in sense that we do not pay to breathe it. Question: Are benefits of cleaning up air worth the costs? People pay extra to buy

Explain the concept of land economic, (a) Give an overview of the Concept ...

(a) Give an overview of the Concept of Land Economic (b) Provide a definition of Land/Economics (c) Discuss the origin of Land Economics (d) Modern and Traditional Land Ec

Joint equilibrium quantity, The sole producer of the anti-diarrhea drug STO...

The sole producer of the anti-diarrhea drug STOP supplies two retail pharmacies in an isolated village. The two pharmacies compete à la Cournot in a market characterized by an inve

Economic models, the general characterictics of economic models,its limitat...

the general characterictics of economic models,its limitations and verification

Draw demand curve, Suppose that the following equation characterizes the de...

Suppose that the following equation characterizes the demand for primary education in a developing country X: Q = 100 – 2P Where Q is quantity demanded in years of schooling and

Assignment, Illustrate and discuss the impliction of various market structu...

Illustrate and discuss the impliction of various market structures(competitive and non-competitive)

Inflation-unemployment trade-off under rational expectations, Inflation-Une...

Inflation-Unemployment Trade-off under Rational Expectations : Robert Lucas (1972) pointed out another implication of the above hypothesis of adaptive expectations. Suppose in

Indifference curves, Indifference Curves: Every consumption-leisure point,...

Indifference Curves: Every consumption-leisure point, (l; c), in the diagram is associated with a unique level of utility. The line II represents the individuals indifference curv

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd