ECO 111 Extra Credit Essay - Stephan Guran Economics 111...

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Stephan Guran Economics 111 Extra Credit In the general spectrum of Microeconomics, there are two key concepts that are analyzed when two firms merge together. These concepts are known as Economies of Scale and Diseconomies of Scale. They are both similar and different to one another in various ways. Economies of Scale in a company occurs when a larger number of a specific good or service can be produced with less input costs. Meanwhile, Diseconomies of Scale in a business can take place when firms produce goods at increased costs per-unit. Economies of Scale could occur within any firms that merge together, pool their resources, and distribute more product at a smaller cost to the consumer. For example, in the article about the merger between publishers “Random House” and “Penguin”, it states that in working together, it can easily produce and sell hard copied books despite the competition of the growing “e-book” industry. A big reason why these publishers can overcome the challenges
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