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Using Economies of Scale in Exam Analysis

Geoff Riley

26th February 2023

I've just added a couple of short topic videos walking through analysis diagrams showing how economies of scale can impact on business profits and consumer surplus.

Economies of scale offer the potential for a business to move from loss to positive profit even when they charge a lower price per unit. In this short topic video, we walk through the analysis diagram that allows you to show this.

This short video walks through an analysis diagram showing the relationship between economies of scale and consumer surplus. You will always get credit in an exam for including concepts such as economic efficiency and consumer welfare in your analysis and evaluation. Economies of scale have the potential to increase both consumer surplus and producer profit since AC and prices have fallen.

Here is a Quizlet covering economies and diseconomies of scale for low-stakes retrieval practice.

Economies and diseconomies of scale flashcards

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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