How can the long run average cost (LRAC) curve be derived from the short run average total cost (SRATC) curve The long run average cost represents the lowest possible cost for any given output , It is derived from the short run average total cost curve by using various scenarios and variables to experiment and associate the long run average with the short run average The short run allows us to see where profit is maximized Describe economies of scale and diseconomies of scale Economics of scale refers to the change in long term costs The diseconomies of scale decline in long run costs Due to large scale operations such as Sysco, where they have over 300 distribution facilities across the globe Diseconomies of scale are the increase in the long run cost wise due to the size of the operation Diseconomies of scale result from businesses becoming exceptionally large and means of communication and coordination get increasingly tricky Using a real world company (other than Sysco), explain the causes of economies of scale for your company Sam's Club is an excellent example of the economics of scale this store is where members can shop in bulk for a low annual membership fee Items can be purchased in large quantities at a lower cost, which keeps people coming back Saving money is the ultimate goal Sam's Club provides items in bulk, from groceries for the household to products for businesses, all at member pricing Explain how economies of scale help your company compete in its industry Economies of scale can help Sam's Club compete in the industry by using its model to its advantage Having the warehouse style layout and the membership system allows Sam's Club to keep track of its business and profits This system benefits the consumer because the store they frequent will use their membership to keep products they like in store The bulk buying warehouse style of Sam's Club puts them ahead of the competition because the ease of shopping and getting a better value draws people into the building, even for one item need a response

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How can the long-run average cost (LRAC) curve be derived from the short-run average total cost (SRATC) curve? The long-run average cost represents the lowest

How can the long-run average cost (LRAC) curve be derived from the short-run average total cost (SRATC) curve?

The long-run average cost represents the lowest possible cost for any given output., It is derived from the short-run average total cost curve by using various scenarios and variables to experiment and associate the long-run average with the short-run average. The short run allows us to see where profit is maximized.

Describe economies of scale and diseconomies of scale.

Economics of scale refers to the change in long-term costs. The diseconomies of scale decline in long-run costs. Due to large-scale operations such as Sysco, where they have over 300 distribution facilities across the globe. Diseconomies of scale are the increase in the long-run- cost-wise due to the size of the operation. Diseconomies of scale result from businesses becoming exceptionally large and means of communication and coordination get increasingly tricky.

Using a real-world company (other than Sysco), explain the causes of economies of scale for your company.

Sam's Club is an excellent example of the economics of scale; this store is where members can shop in bulk for a low annual membership fee. Items can be purchased in large quantities at a lower cost, which keeps people coming back. Saving money is the ultimate goal. Sam's Club provides items in bulk, from groceries for the household to products for businesses, all at member pricing.

Explain how economies of scale help your company compete in its industry.

Economies of scale can help Sam's Club compete in the industry by using its model to its advantage. Having the warehouse-style layout and the membership system allows Sam's Club to keep track of its business and profits. This system benefits the consumer because the store they frequent will use their membership to keep products they like in store. The bulk buying/warehouse style of Sam's Club puts them ahead of the competition because the ease of shopping and getting a better value draws people into the building, even for one item.

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