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Economies of scale?

Consider the following:
1. a diamond-mining company.
2. an interior design firm in which design projects are based on the expertise of the firm's owner.
3. a telemarketing firm in which employees make sales calls using computers and telephones.

What kind of scales are the firms likely to experience?

A. Diseconomies of scale

B. Economies of scale

C. Constant returns to scale

1. B. Economies of scale for a diamond-mining company: It will face economies of scale because with the expansion of scale it will see economies resulting through common facilities of equipment repairing, purchase of raw materials , greater flexibility in transportation required in the mining property and in deployment of management manpower, and also economies esulting from common stores and inventory control. Costs on all these will rise less than in proportion of scale.
2. A: Diseconomies of scale as an interior design firm in which design projects are based on the expertise of the firm's owner. will suffer from diseconomies of scale beyond a point because it is difficult to hire addtional persons with the same expertise s as the firm's owner. THerefore as more and more projects are taken on hand simultaneously, the owner will be able to devote fewer hours of his attention to each design project on hand which will result in underutilisation of the assistants he hires for different projects. There could be project completion delays due to time constraint of the owner, there being a limit of 24 hours and 7 days a week vailable to him. Being overworked with too many projects in hand his productivity will fall, resulting in higher costs.
3. C: Constant Returns to scale: a telemarketing firm in which employees make sales calls using computers and telephones, is likely to see constant returns to scale. Telephone charges are the same per call and the wages of telephone callers employed is the same. There would be a fixed proportion of supervissors to oversee callers. Telemarketing is more modular in nature. Teams of telemarketing and their equipments will rise in the same proportion of the potential customer base expansion.

Find Scale Telephone On eBay Below:

HO Scale HO Scale Bachmann Various RR Signs Telephone Poles New unopened
HO Scale HO Scale Bachmann Various RR Signs Telephone Poles New unopened
$5.00
HO Scale trackside Buildings Signal Bridge Telephone Poles Crossing gates
HO Scale trackside Buildings Signal Bridge Telephone Poles Crossing gates
$4.00
PREISER HO SCALE 10374 TELEPHONE WORKER WITH TENT
PREISER HO SCALE 10374 TELEPHONE WORKER WITH TENT
$25.49
HO SCALE 12 PIECE TELEPHONE POLE SET 5 50 19
HO SCALE 12 PIECE TELEPHONE POLE SET 5 50 19
$8.99
HO Scale Atlas Telephone Shanty  Pole  705
HO Scale Atlas Telephone Shanty Pole 705
$7.00
RIX HO Scale 628 0030 Railroad Telephone Poles 30  40  Poles 36 pk NIB
RIX HO Scale 628 0030 Railroad Telephone Poles 30 40 Poles 36 pk NIB
$6.35
Atlas HO Scale Telephone Shanty  Pole Kit 705 Ships FREE In US
Atlas HO Scale Telephone Shanty Pole Kit 705 Ships FREE In US
$9.99
GC Laser HO Scale Telephone Booth 2 pack Kit 19091 Bob The Train Guy
GC Laser HO Scale Telephone Booth 2 pack Kit 19091 Bob The Train Guy
$6.15
1 HO SCALE LOT OF DETAILED TELEPHONE POLES
1 HO SCALE LOT OF DETAILED TELEPHONE POLES
$12.95
HO SCALE PEOPLE EtcSIGNS Telephone Poles New Old Stock
HO SCALE PEOPLE EtcSIGNS Telephone Poles New Old Stock
$5.00
HO  N scale model train building lot track billboards and telephone poles
HO N scale model train building lot track billboards and telephone poles
$61.00
Bachmann HO Scale Train Model Plastic Telephone poles Accessories NIP New
Bachmann HO Scale Train Model Plastic Telephone poles Accessories NIP New
$9.90
BACHMANN HO SCALE 36 SIGNS AND TELEPHONE POLES 24 SIGNS 12 POLES SEALED IN BAGS
BACHMANN HO SCALE 36 SIGNS AND TELEPHONE POLES 24 SIGNS 12 POLES SEALED IN BAGS
$9.30
AHM Rail Accessories Telephone Poles in box HO Scale 4708
AHM Rail Accessories Telephone Poles in box HO Scale 4708
$14.00
SALE Stewart Products 126 12 Metal Utility Poles Telephone Electric HO Scale
SALE Stewart Products 126 12 Metal Utility Poles Telephone Electric HO Scale
$11.99
HO Scale Detailed Parts LOT Telephone Poles Wall +
HO Scale Detailed Parts LOT Telephone Poles Wall +
$3.99
Osborn 1068 Telephone Poles HO Scale
Osborn 1068 Telephone Poles HO Scale
$5.05
ATLAS 775 3 Boxes HO Scale Telephone Poles 12 box new
ATLAS 775 3 Boxes HO Scale Telephone Poles 12 box new
$15.50
ATLAS HO Scale 701 Elevated Tower 705 Telephone Shack new
ATLAS HO Scale 701 Elevated Tower 705 Telephone Shack new
$9.90
HO Scale TRAIN SCENERY LANDSCAPE MEGA LOT Trees Telephone Polls NICE LOOK
HO Scale TRAIN SCENERY LANDSCAPE MEGA LOT Trees Telephone Polls NICE LOOK
$42.49
Atlas HO Scale 30 Telephone Poles Brand New Never Used
Atlas HO Scale 30 Telephone Poles Brand New Never Used
$20.00
Vintage B B Brand Telephone Poles Model Railroad HO Scale Set Of Eleven tr596
Vintage B B Brand Telephone Poles Model Railroad HO Scale Set Of Eleven tr596
$5.95
Large Lot of Bachmann HO Scale signs people telephone poles 187 over 70 pcs
Large Lot of Bachmann HO Scale signs people telephone poles 187 over 70 pcs
$9.99
HO O Scale Telephone Poles Peoples and Road Signs LOT
HO O Scale Telephone Poles Peoples and Road Signs LOT
$15.00
New HO Scale Telephone Poles 12 Piece by Bachmann
New HO Scale Telephone Poles 12 Piece by Bachmann
$9.95
HO Scale Atlas 12 Telephone Poles Kit New in Orig Box
HO Scale Atlas 12 Telephone Poles Kit New in Orig Box
$7.55
HO Scale Telephone Poles Set of 14
HO Scale Telephone Poles Set of 14
$12.95
D54 12 VINTAGE PLASTIC HO SCALE TELEPHONE POLES NEVER USED
D54 12 VINTAGE PLASTIC HO SCALE TELEPHONE POLES NEVER USED
$5.99
Lot of 29 ATLAS HO Scale TELEPHONE TELEGRAPH POWER POLES
Lot of 29 ATLAS HO Scale TELEPHONE TELEGRAPH POWER POLES
$9.95
ho scale scenery lots trees autos containers people telephone poles misc
ho scale scenery lots trees autos containers people telephone poles misc
$3.25
HO SCALE ATLAS TRACKSIDE SHANTY 702  TELEPHONE SHANTY WITH POLE 705 COMPLETE
HO SCALE ATLAS TRACKSIDE SHANTY 702 TELEPHONE SHANTY WITH POLE 705 COMPLETE
$4.00
ATLAS NEW SET OF 12 TELEPHONE POLES HO SCALE RAILROAD
ATLAS NEW SET OF 12 TELEPHONE POLES HO SCALE RAILROAD
$7.99
NEW SET OF TELEPHONE POLES AND SIGNS HO SCALE 1 87
NEW SET OF TELEPHONE POLES AND SIGNS HO SCALE 1 87
$2.99
Ho Scale Prewired Telephone Poles Model Train Accessory 6
Ho Scale Prewired Telephone Poles Model Train Accessory 6
$9.95
Scale Plastic Telephone Poles Train Accessory 70
Scale Plastic Telephone Poles Train Accessory 70
$6.95
HO scale Model train Railway layout Shelter Station Bus Stop + telephone booth
HO scale Model train Railway layout Shelter Station Bus Stop + telephone booth
$10.99
3x HO 187 Scale Model Train Layout Telephone Booth Shanty Shed Guard Pavilion
3x HO 187 Scale Model Train Layout Telephone Booth Shanty Shed Guard Pavilion
$12.99
HO Scale Atlas Telephone Shanty Pole Kit 705
HO Scale Atlas Telephone Shanty Pole Kit 705
$6.04
HO scale people pedestrian side walk telephone phone booth cart plastic model
HO scale people pedestrian side walk telephone phone booth cart plastic model
$18.11
Lot of HO scale new Telephone polesstreet  track signs and gas pumps
Lot of HO scale new Telephone polesstreet track signs and gas pumps
$9.99


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