Economies of large-Scale Production
Efficient of Capital Equipment. There is a large scope for the u ‘e of machinery which results in lower costs. A large producer can in an up-to date and expensive machinery. He can also have his own repairing unit. Specialized machinery an be employed for each Job. The result is that production is very economical. A small producer, with a small market, cannot keep the machinery continuously working. Keeping it idle is uneconomical. A large producer can work it tenuously and reap the resulting economies. Economy of Specialized Lab concern, there is ample scope for laborious. Specialized labour produces a larger and of better quality. It is only in a that every person can be put on the best perform. The large-scale prod e the be t out of every person.
Economies of Buying and Selling. While purchasing raw material and other accessories, a big businessman secure specially favorable terms on account of its large custom. While selling its goods it can attract customers by offering a greater variety and by ensuring prompt execution of the orders placed with it. A lower rate of profit results in large sales and higher net profits in a larger-scale business.
Experiments and Research. A large concern can afford. to spend liberally on research and experiments. It is well-known that, in the long run, these expenses more than repay. Successful rehears may lead to the discovery of a cheaper process. This may bring a large profit. Only a large-scale business can incur such expenditure.
Experiments and Research. A large concern can afford. to spend liberally on research and experiments.It is well-known that, in the long run, these expenses more than repay. Successful research may lead to the discovery of a cheaper process. This may bring a large profit. Only a large-scale business can incur such expenditure.
Meeting Adversity. A big business can show better resistance in times of adversity. It has much larger resources. Losses can be easily borne. A small concern will simply collapse under such a strain.
These are some of FTC advantages that a large scale business has over a small-scale business. But let us see the other side.