Impact of "economies of scope" in any commoner’s pocket
The need of
any consumer while purchasing any good or service is to procure it in the least
possible price, for at least the maximum population of the middle income group in
our country, if not all of them. When we go out to purchase number of products,
we tend to look up for one such place where we can find all the required number
of items that we have in our purchase list. Thanks to our modern day rescuers, which
are malls and shopping marts, that we do not need to ramble around in search of
all our required items. The simple work mechanism of these associations has
ensured that we get every required product at one place with the least of
hustle and bustle with a very less expense to endure. But if we come to the
point, what would be the reason behind any association to follow such a
methodology of work? The answer is pretty distinct: Economies of scope
Economies of scope: It is an economic concept wherein if
diversified or multiple number of items are being used in any production function
at a particular point of time, the cost of producing of those items individually
tends to reduce to a great extent.
In this
scenario, the shopping marts may seem to be in loss because of obvious reasons,
more items = more production cost. Whereas it is just the opposite of our beliefs. These place
have more of cost saving because they manufacture their goods in one particular
place.
Some common example of Economies of scope:
·
Mobile
companies providing earphones and battery chargers as a part of the accessories.
No comments:
Post a Comment