The reason for this phenomenon may be that the internal structure becomes more complex due to the expansion of scale, and this complexity will consume internal resources, thus reducing the benefits that scale expansion should bring to each other, or it may be the growth of bureaucracy or the increase of innovation barriers, so there is a phenomenon of uneconomical scale.
Scale economy is a concept from scale economy.
Economies of scale are generally defined as the initial stage, and the economic benefits of manufacturers are improved by expanding production scale, which is called economies of scale; When the production expands to a certain scale, manufacturers continue to expand the production scale, which will lead to a decline in economic benefits, which is called diseconomy of scale.
Contrary to economies of scale, the larger the scale, the lower the cost. Decreasing economies of scale means that the larger the scale, the higher the cost, which leads to the decrease of the company's profit rate.
There are total cost curve and average cost curve in economics, both of which are concave upward. The intersection of these two curves means the existence of optimal scale. Before reaching this optimal scale, the bigger the scale, the better. This is the so-called "economies of scale". After reaching the optimal scale, the larger the scale, the more uneconomical it is, that is, the scale is uneconomical.
Question 2: What are economies of scale and diseconomies of scale? Economiesofscale, also known as "scale benefit", refers to the downward trend of unit cost with the expansion of production capacity, that is, the long-term cost curve shows a downward trend. Scale refers to the batch production, there are two specific situations. One is the change of production batch under the condition of constant production equipment, that is, the change of production batch under the condition of constant production capacity, and the other is the change of production batch under the condition of constant production equipment, that is, the change of production capacity. Scale in the concept of scale economy refers to the latter, that is, the expansion of production batch is accompanied by the expansion of production capacity, while economy has the meaning of saving, benefit and income. According to the authoritative dictionary of economics, economies of scale refer to the existence of economies of scale (or uneconomical) for a product (whether a single product or a composite product) within a certain output range under a given technical condition. Specifically, the "long-term average cost curve" is downward sloping. In this sense, the long-term average cost curve is the scale curve, and the lowest point on the long-term average cost curve is "mininumoptimalscale (hereinafter referred to as mos)". The above definition is universal, and the economies of scale in the banking industry are derived from it. Scale benefit refers to the degree of influence on output change when various production factors increase in the same proportion. If the output of the enterprise increases more than the input, the enterprise expenditure will increase the scale benefit. If the output increment of an enterprise is less than the input increment, the scale benefit of the enterprise will be reduced. If input and output increase in the same proportion, economies of scale will remain unchanged.
Question 3: What do you mean by uneconomical scale? Hello, classmate, I'm glad to answer your question!
The word you said belongs to the vocabulary of futures industry. Mastering the vocabulary of futures industry can make you feel at home in the study of futures industry. The translation and meaning of this word are as follows: it means that in a company, economies of scale no longer exist, production costs will not continue to decrease with each additional unit, and marginal costs will tend to increase.
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Question 4: Why are there economies of scale and economies of scale? The academic debate on the scale economy of commercial banks has been fierce. There is no consistent view on the existence of scale economy in commercial banks and its influencing factors. Some scholars' research shows that there is no scale economy in commercial banks, and some scholars believe that there is scale economy in commercial banks, so the scale economy of commercial banks has become a mystery in academic circles. I. Literature Summary Since 1960s and 1970s, western economists have done a lot of research on the economies of scale of banks, but they have not reached a consensus on the existence and timing of economies of scale. First of all, there are different views on whether commercial banks have economies of scale. Most scholars believe that commercial banks have economies of scale, and the focus of research should be on economies of scale. Some scholars believe that there is no economies of scale in such a special organization as commercial banks. Drake and Howcroft (1994) show that most British commercial banks do not have economies of scale. Athanas sopoulus( 1995) and McKillop( 1992) found that there were no economies of scale and scope in Irish commercial banks. Secondly, although most scholars believe that commercial banks have economies of scale, there are great differences in the identification of economies of scale. Berger, Hanwick and Humphrey (1987) believe that among small and medium-sized financial institutions in the United States, banks with total assets exceeding 1 billion dollars have economies of scale or economies of scale are not obvious. Hunter and Timme( 1986) found that the upper limit of economies of scale of bank holding companies with a single banking system is $4.2 billion, beyond which economies of scale will occur. Nurras, Ray and Miller (1990) believe that the efficiency of banks with total assets exceeding 6 billion dollars will gradually decline with the expansion of their scale. Ashton (1998)' s research on British banking shows that smaller banks have higher economies of scale, and banks with total assets exceeding 5 billion pounds have economies of scale. In addition, the conclusions of the research on the economies of scale of commercial banks in different countries and regions are also inconsistent. For American commercial banks, the general literature including Berger( 1997) and Humphrey( 1995) tend to think that the average cost curve of commercial banks is relatively flat as a whole, and small and medium-sized commercial banks have economies of scale, while large commercial banks generally show constant returns on scale or uneconomical scale. However, unlike the classic research in the United States, the European research literature, including AllenandRai( 1996) and CavalloandRossi(200 1), generally believes that the average cost curve of European commercial banks is relatively flat U-shaped, and there are economies of scale. In China, although the literature about the economies of scale of commercial banks began to appear in recent years, the number is not much, but the debate is very fierce, and there has never been a consensus on the economies of scale of commercial banks in China. Zhao Xu (2000) made an empirical analysis by using data envelopment analysis (DEA), and pointed out that compared with foreign banks, the effective economic scale of state-owned banks is smaller than the actual scale. Wang Zhenshan (2000) analyzed the relationship between the scale of banks and the operating efficiency of commercial banks, and pointed out that in terms of the scale efficiency of existing commercial banks in China, the scale is too small or too large and there are economies of scale, and the main factor restricting the scale efficiency of commercial banks in China is banking technology. Wang Cong and Zou Pengfei (2003) used the profit function to test the economies of scale of China's banking industry, and found that most commercial banks are uneconomical in scale, and the degree of uneconomical in scale is positively related to the size of banks' assets. Most studies, including Xu Chuankan (2002), Liu Biaowen (2003), Yu Liangchun and Gao Bo (2003), Li Du and Wang Feng (2003) and Liu Zonghua (2004), have classified the commercial banks in China, and pointed out that the four state-owned banks are uneconomical in scale, while the joint-stock banks are characterized by economies of scale. Although the debate about the scale economy of commercial banks is still going on, economists have not made an accurate conclusion on the characteristics of the scale economy of commercial banks by econometric methods, in reality, the merger and acquisition expansion of commercial banks based on the pursuit of scale economy is in full swing ...
Question 5: Why are economies of scale and economies of scale uneconomical? Reason: 1, if the enterprise produces on a large scale, workers can realize specialized production and engage in a production with the highest production efficiency; 2. Scale can produce flexibility. By changing the combination of input factors used in enterprise production, operators can make the organization of production process more efficient; 3. Enterprises may buy some production input factors at a lower cost, because their purchase volume is huge, so their bargaining power is strong. Reasons for uneconomical scale: 1, at least in the short term, factories and equipment restrict workers' more efficient production; 2. The management of large enterprises will become more complicated and inefficient with the increase of tasks; 3. When the output reaches a certain amount, the advantages of bulk purchasing may disappear. At this time, the supply of some key input factors may be limited, thus pushing up the cost.
Question 6: The definition of diseconomy of scale comes from the concept of economies of scale. Economies of scale are generally defined as the initial stage, and the economic benefits of manufacturers are improved by expanding production scale, which is called economies of scale; When the production expands to a certain scale, manufacturers continue to expand the production scale, which will lead to a decline in economic benefits, which is called diseconomy of scale. Contrary to economies of scale, the larger the scale, the lower the cost. Decreasing economies of scale means that the larger the scale, the higher the cost, which leads to the decrease of the company's profit rate. There are total cost curve and average cost curve in economics, both of which are concave upward. The intersection of these two curves means the existence of optimal scale. Before reaching this optimal scale, the bigger the scale, the better. This is the so-called "economies of scale". After reaching the optimal scale, the larger the scale, the more uneconomical it is, that is, the scale is uneconomical.
Question 7: What are the reasons for the large-scale diseconomy of enterprises? The reason for this phenomenon may be that the internal agglomeration becomes more complicated due to the expansion of scale, and this complexity will consume internal resources, thus reducing the benefits that scale expansion should bring. Generally speaking, the scale of an enterprise is directly proportional to the difficulty of management and inversely proportional to the efficiency of management. Large enterprises must set up complex management levels and design numerous incentive and supervision mechanisms, which will inevitably increase the number of non-production personnel and equipment, thus increasing the cost and expenses of enterprises.
Question 8: Economies of scale and diseconomies of scale. Who can say it in common language? Thank you. 1. The economic benefits brought by large-scale production are called economies of scale, which means that within a certain range, with the increase of output, the average cost is decreasing. Economies of scale are due to the fact that within a certain output range, it can be considered that the fixed cost changes little, so the newly added products can share more fixed costs, thus reducing the total cost.
People consciously choose and control the production scale according to the requirements of the changing law of the quantitative combination mode of productive forces, so as to increase output, reduce costs and obtain the best economic benefits. Economies of scale or productivity scale is the problem of determining the best production scale.
Economies of scale include departmental economies of scale, urban economies of scale and enterprise economies of scale. In western economics, economies of scale are mainly used to study enterprise economy. However, as an important category of productivity economics, scale economy has a broader meaning, including all levels of economic scale that can obtain economic benefits from macro to micro.
2. Uneconomical scale:
(1) Definition: Uneconomical scale means that the long-term average cost increases with the expansion of production scale.
(2) Classification of scale diseconomy: internal diseconomy and external diseconomy.
A. The meaning, causes and manifestations of internal diseconomy of scale refer to the long-term average cost increase caused by the change of the enterprise's own factors when the scale of the enterprise expands. The main reason of internal diseconomy is the decrease of management efficiency caused by the expansion of enterprise scale. The inherent diseconomy makes the long-term average cost curve rise gradually from the lowest point.
B. the meaning, causes and manifestations of external diseconomy of scale. External diseconomy refers to the phenomenon that the long-term average cost of an enterprise rises with the expansion of the industry, and its root lies in the deterioration of the external environment of the enterprise caused by the expansion of the industry, such as the rise of factor prices and the decline of the sales market. External diseconomy makes the long-term average cost curve move vertically upward, which means that the long-term average cost of chemical expenses is higher than in the past at each unit output level.
Question 9: Does uneconomical scale mean that the enterprise is too large? Don't!
Uneconomical scale refers to the increase of long-term average cost when the production scale is expanded. There are many reasons for the uneconomical scale of enterprise groups, such as unscientific determination method of scale economy, extensive economic growth mode and insufficient optimization of group structure.