I’m in my economics class and half of what I’m learning makes no sense. Part of it is the way things are explained—I have ADD, so comprehension is difficult for me.
No matter how many time I read I just can’t understand it.
In: 4
Economy of scale:
You build a toy car by hand. Each one is special parts and hourly work and is pretty expensive when everything is tallied up.
You start a factory that makes this toy car. Sure, the machines/building/employees are expensive, but now the parts are bought in bulk and 1000 toys can be made in 1 hour as opposed to, like 3. Production for the car because super low, even to the point of every car sold is more than enough to cover expenses.
Diseconomy:
The business gets bigger, more employees and cost bloat like rents end up making a big business cost more to keep running than a small one.
Latest Answers