BUSI510 Week 3 Discussion

When we talked about production and costs we need to recognize that managers face more decisions in the long run. Why? Because it is possible changes can occur in the combinations of inputs used in the production process. Because of the possibilities of these changes long run decisions are focused on minimizing the costs of production. An important consideration in minimizing these costs is the strategy of economies of scale defined as creating a lower unit cost by implementing a larger scale of production. This means that the average costs of production are lowered as the production is at larger output levels. For the second part of this discussion complete the following task by Friday and then respond to at least two of your classmates’ posting by Sunday:
• Identify and discuss the primary factors that are necessary to achieve economies of scale.