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User_gary Posted 16 years ago
Vocabulary

Economies of scale, installed companies

Minimum Economic Scales of Operation was introduced in 1986 with the objective of encouraging enterprises to seek benefit of economies of scale by expansion of existing installed companies.

Please explain to me the emboldened parts.
  

Top answer

"economies of scale" refers to the idea that the bigger a company grows, the more cheaply it can deliver goods or services. For example, a company might make a million widgets a year at $10 per widget, but if it made 10 million widgets a year then each widget might only cost $5. I'm not entirely sure what "installed companies" means.

— Mr Wordy

  • "economies of scale" refers to the idea that the bigger a company grows, the more cheaply it can deliver goods or services.
  • For example, a company might make a million widgets a year at $10 per widget, but if it made 10 million widgets a year then each widget might only cost $5.
  • I'm not entirely sure what "installed companies" means.
  • It may just be an unfamiliar way of saying "established companies".
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1 Answers
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"economies of scale" refers to the idea that the bigger a company grows, the more cheaply it can deliver goods or services. For example, a company might make a million widgets a year at $10 per widget, but if it made 10 million widgets a year then each widget might only cost $5.

I'm not entirely sure what "installed companies" means. It may just be an unfamiliar way of saying "establishe
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