List Some External Economies of Scale and Some External Diseconomies

question 99

Essay

List some external economies of scale and some external diseconomies of scale that might be realized by an airline in an airport. How do these economies or diseconomies of scale affect the shape of the long-run industry supply curve?

---

Definitions:

Economic Order Quantity

A calculation used to determine the most efficient order size that minimizes the sum of ordering and holding costs associated with inventory management.

Holding Costs

Expenses associated with storing inventory, including warehouse storage fees, insurance, and spoilage costs, until the inventory is sold or used.

Purchase Price

The amount of money required to acquire a good or service.

Stock-Out Costs

The expenses incurred by a business when it runs out of stock on a particular item, including lost sales, customer dissatisfaction, and potential reduction in market share.