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Economics - SAC5 – firm should be a regional player in...

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SAC1 – single entrepreneur who manages all phases of business; 10 painters; primarily residential SAC2 – single entrepreneur buys a commercial painter; 100 painters; residential and commercial business/ hires 4 foremen to handle production SAC3 – firm acquires a small plant manufacturer (reduce commercial costs associated with paint); separate finance dept/residential painters/ commercial painters shift from hand painting to spray maintaining SAC4 – firm secures a contract to paint all government buildings in the city of Philadelphia
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Unformatted text preview: SAC5 – firm should be a regional player in the southeast Pennsylvania market; underestimate the extent of competition SAC1 to SAC4 costs go down and quantity rises more than double that costs went down; increasing returns to scale SAC4 – minimum efficient size Constant returns to scale Extension of MES creates a barrier to entry of competition - monopoly...
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