ABM ECON

econ test review

Market efficiency condition

MB=P=MP

Marginal benefit condition

MB=P

Marginal cost condition

MC=P

Internal economies of scale

are reductions in per-unit costs as a firm increases its output, resulting from efficiencies gained within the company.

External diseconomies of scale

occur when a firm's per-unit costs increase as industry output expands, often due to factors like increased resource prices or congestion effects.

Internal diseconomies of scale

refer to the increases in per-unit costs as a firm grows, often attributed to rising costs in supplies or inefficiencies within the industry that affect all firms.

External economies of scale

Refer to the decrease in per-unit cost as industry output expands