[ORDER SOLUTION] Principles of Economics
Write an article on principles of economics continuous assessment Paper must be at least 1750 words. Please, no plagiarized work! The minimum efficient scale comprises a range of output levels. It is where the constant returns to scale are realized. Furthermore, the cost of producing a unit of a service or a product is at its lowest. The minimum efficiency scale in a particular industry depends on the nature of the costs of production. A firm that has a high ratio of fixed to variable costs has the ability to reduce average cost through the increased scale of output. This can result in a concentrated market structure.Economies of scale can be a barrier to entry for the new firms. This results from the achievement of cost advantages by existing firms. The firms with cost advantages undercut entering firms by lowering the prices of the goods or services they produced. Small market percentages do not allow for full utilization of economies of scale. This is brought about when many firms are able to attain MES. Many firms in the market cause a lot of competition with each other. In addition, with natural monopoly, the long-run average cost curve falls over a huge range of output. This may enable one or two suppliers to utilize economies of scale available.Empowered employees are able to increase their productivity. Increased employee productivity leads to reduced cost of production. Employees are empowered through, specialization, training and motivation. Larger firms split the production process into separate tasks. As a result, the employees become experts in their areas and learn to utilize their resources effectively. As a result, losses and wastages are dramatically reduced. Reduced losses and wastages culminate in reduced production costs. Trained workforce enables the employees to acquire more skills and knowledge in the areas of their work. Trained employees increase the speed and accuracy of completing their tasks. As a result, more work is done within a short time possible. The company is able to save money by reducing the length of working time, especially where employees are paid on a time basis. .
