How do you know if economies of scale exists in any particular industry?

2007-10-22 7:25 pm
What evidences can I use to prove that it does (not) exist?

回答 (7)

2007-10-22 7:34 pm
✔ 最佳答案
There are two costs associated with any capital venture. Fixed and variable.

Fixed costs, such as buildings, management, taxes, advertising, are all costs that are incurred no matter how many items are produced or sold.

Variable costs are costs that rise or fall directly with the number of items manufactured or sold.

Economies of scale usually exist when the fixed costs become less that 25% of the variable costs. At this point, the cost of an item is more closely related to the net value of the product, and increasing the volume will have very little effect on the final price.

To prove the economy of scale in any industry, just use it's annual report, which should spell out the fixed costs of the operation, and then do the math. Also, as time goes on, fixed costs drop, as the original investment in tooling is considered a fixed cost, and is depreciated over a period, ususally 7 to 10 years. After than point it is no longer calculated as a cost at all.
2007-10-22 7:29 pm
Are they large enough that it makes a difference to suppliers or vendors when they order (or don't)?
2007-10-22 7:39 pm
If a particular industry has companies that are large in terms of market share (% of the industry that one company makes up), then there are usually economies of scale at play. If an industry does not have economies of scale, there would be little incentive for growth and would lead to having small companies just large enough to meet local demand. It's actually difficult to find an industry without economies of scale. Almost every business has fixed costs (costs which do not change with an increase in output). The question would more likely be better asked as "How do you know if economies of scale play a large role in any particular industry? " some examples of industries with low economies of scale are things like masseuse, hair salon, lawn care, generally anything that is a service industry with a large amount of human action as a product. Industries that revolve around the production and distribution of tangible goods almost always have a high degree of economies of scale, which is why chains like Walmart and producers like Microsoft have huge market share.
2007-10-22 7:35 pm
just have historical data of the particular industry and then compare it..
u will definately come to know about it...
2007-10-22 7:30 pm
economies of scale are more often realized in a particular company. if you are wondering if the industry has any companies that enjoy economies of scale, look at the market share of the leading companies. that will give you a few companies to focus on. Next find out what parts of the production process they handle themselves, vs farm out to other companies. When you find a company that is getting a large part of a market and manufacturing or creating thier own products or services, they are probably enjoying some economies of scale.
2007-10-22 7:28 pm
check in google
2007-10-22 7:28 pm
Theres always private investigators


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