Question

Difference between real and pecuniary economies of scale

Answer 1

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Real economies are those associated with the reduction in the physical quantity of inputs, raw materials, various types of labour and capital.Pecuniary economies are those realized from paying lower prices for resources used in production and distribution of the products.

Answer 2

Answer:

The economies of scale are the cost advantages that each economy obtains by its scale of operation.

Explanation:

• As they apply to a variety of businesses and organizations, and thus have certain limits as based on the ideas of Adam smith's larger production return by the division of labor.

• The real economies of production relate to the production, selling and marketing and the managerial and the transport functions. While the pecuniary relates to lowering the prices of bulk buying.

• Lowering the cost of finance.

• Lowering the cost of advertising on a large scale.

• And lowering the wages and salaries by the monopolies of the large firms.

• The real economies re differentiated based on the production i.e the labor. technical and the inventory economies.

• While the selling and marketing are related to the advertising, model scale and the deals which are represented by the wholesalers and retailers.