Explain abt internal and external economics?

Question

Explain abt internal and external economics?

Answer 1

Types of economics:

Basically there are two types of economics:

1. Internal Economics

2. External Economics

Internal economics:

a. Technical Economies: It is concerned with the size of the firm, superior technique or increased specialization.

b. Managerial Economies: It arises by creating special departments or functional specialization. It is useful when production is taken on a large scale.

c. Commercial Economies: Purchase or material and goods, greater bargaining power, in case of large purchases and concessions in transport.

d. Financial Economies: Big firms enjoy the position of better credit worthiness and can borrow money at a favorable rate if interest.

e. Risk Bearing Economies: A big firm can spread the risks over a larger area by diversifying output.

External economics:

a. Economics of concentration (advantages of localization)

b. Economics of information: Publications, technical journals, central research institutes are the examples.