EBK OM
6th Edition
ISBN: 9781305888210
Author: Collier
Publisher: YUZU
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Question
Chapter 10, Problem 1DQ
Summary Introduction
Interpretation:Economies and diseconomies of scale at a college environment are to be discussed.
Concept Introduction:Economies of scale refers to the cost advantages that the businesses gain in terms of increased production while maintaining a decreased cost per unit.
Diseconomies per scale occurs when a company starts gaining cost disadvantages when the business starts to grow large that they fail in maintaining lower costs.
Expert Solution & Answer
Explanation of Solution
Economies of Scale in College Environment
- Enrolling the maximum number of students per batch covering up full capacity of a classroom. This will minimize the additional costs such as A/C, electricity, water and also other costs such as staff overtime payments and so on.
- Exams to be conducted for several batches at once, this will also help the business in gaining the cost advantage by saving the A/C, electricity, water and also other costs such as staff overtime payments in correcting the papers as well as in releasing the results.
- Holding graduation ceremonies for several batches is essential as it will give the ability to cover up the huge costs that will incur due to such ceremonies.
Diseconomies of Scale in College Environment
- Allocation of large classrooms for a lecture that has a considerably low head count, this will be a waste of A/C, electricity, water and also other costs such as staff overtime payments.
- Printing the notes when they already appear on the online student portal.
- Printing the notes in bulk more than the requirement.
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