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Discuss the Relative Advantages and Disadvantages of Large and Small

question 53

Essay

Discuss the relative advantages and disadvantages of large and small companies in terms of economies of scale and scope, as well as diseconomies of scale. Give examples.


Definitions:

Nonprice Rationing

Methods of distributing goods or services using criteria other than price, such as queues or rationing cards.

Price Ceiling

A government-imposed limit on how high a price is charged for a product, aimed at protecting consumers from rapid price increases.

Queuing

Waiting in line as a means of distributing goods and services: a nonprice rationing mechanism.

Excess Demand

A situation where the quantity demanded of a good or service exceeds its supply at the current price.

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