Scale of production (Micro economics)
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The document defines scale of production as the size of a production plant and technique used by the producer. Scale of production is classified as small-scale or large-scale. Small-scale production uses small plants and less capital/labor, like handicrafts. Large-scale uses more capital and larger quantities of factors to produce more goods, like steel mills. Small-scale advantages include close supervision, more employment, and easy management. Disadvantages are high costs and difficulty competing with large-scale. Large-scale advantages are division of labor, use of machines, and economy of scale. Disadvantages include dangers of overproduction and less supervision.
Scale of production (Micro economics)
- 1. Presented by Group # 3(BBA Hons.I) Seetal Daas(Leader) Bhawan Kumar Shoaib Salman Zahid Hussain Haresh Kumar
- 2. Definition: Scale of Production is set by the size of plant, the number of plants installed and technique of production adopted by producer. Example:Mills,Factories etc.
- 3. The Scale of production is classified as under; (1)Small Scale Production (2)Large Scale Production
- 4. Definition: If a firm produces goods with small sized plants, the scale of production is said to be small scale production. Small scale is associated with low capital output and capital labor ratios. Example: Handicrafts, House Jobs, Flour Chaki, Bakers, Tailor’s Shop etc.
- 5. Definition: If firm uses more capital and larger quantities of other factors and produce more goods/products, it is said to be large Scale production. Example: Steel Mills, Sugar Mills, Agricultural Industries, Textile Industries, Film Industries, Cement Factories, Motor Industries etc.
- 6. Close Supervision Nature of Demand More Employment Need of small Capital Direct relation b/w Workers and Employers Easy Management Freedom of Work
- 7. High Cost of Production Less use of Machines Difficulty in getting Loans Difficulty to face Economic Crisis Costly Raw Materials Lack of Standardized Goods Old Techniques Difficult to face competition with Large Scale Producers
- 8. Division of Labor Use of machines More production Cheap and Easy Loans Standard Goods Research Economy of Buying and Selling
- 9. Evils of Factory System Danger of Over-Production Less Supervision Class Struggle Dependence on Foreign Market Unequal Distribution of Wealth