Capacity and Unit Cost

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  • Created by: skyblue97
  • Created on: 17-04-14 15:34

CAPACITY AND UNIT COST

UNIT COST is the average cost per unit of output.

ECONOMIES OF SCALE is when a firm increases their output and their unit costs fall. Reasons for this may include:

  • Bulk buying
  • Machinery
  • Specialist managers

Ideal capacity utilisation is near 100% because...

  • You get…

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