Lectur2-page10 - Meal preparation for two kids would take just as long as meal preparation for 3 or 4 kids Do you get the idea Businesses also

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This data has been based upon a family with two children. If a family has only one child, they probably spend about 24% more than the values indicated by our data tables. If a family has three of more children, the family will benefit from economies of scale and will probably spend 23% less on each child. What do you mean, “economies of scale”. Well, as families get bigger, their per unit cost of providing for each family member generally decreases. If you are a middle child, or the youngest; you probably wore a hand me down clothes and played with hand me down toys. You were not as expensive to raise as the first born. Housing costs are spread over three or four children instead of two.
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Unformatted text preview: Meal preparation for two kids would take just as long as meal preparation for 3 or 4 kids. Do you get the idea? Businesses also experience economies of scale. Large businesses often have lower per unit production cost than small businesses. This is true to a point. Some businesses get so large that they start to experience “diseconomies of scale.” This occurs most often because the right hand of the business is out of touch with the left hand of the business and per unit costs of production begin to increase due to poor planning, duplication of purchases, low quality control, etc. We will talk about this in more detail later in the semester 10 in more detail later in the semester....
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This note was uploaded on 12/29/2011 for the course ECO 210 taught by Professor Malls during the Fall '10 term at SUNY Stony Brook.

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