Economies of scale and diminishing returns Essay Example for Free

Economies of scale and diminishing returns Essay In Business Economics, the short run is defined as the concept that within a certain period of time, in the future, at least one input is fixed while others are variable and the long run is defined as a period of time in which all factors of production and costs are variable. The law of diminishing returns is a short run concept, which states that increasing successive units of a variable factor to a fixed factor will increase output but eventually the addition to output will start to slow down and would eventually become negative. This is because if capital is fixed, extra labour will eventually get in each other’s way as they attempt to increase production. E.g. think about the effectiveness of extra employees in a factory that’s maximum workers is 100. If the firm employs 150 workers, then the productivity will eventually decrease, as they will get in each other’s way etc. However, this law only applies in the short-term, as in the long run, all factors are variable. As you can see from the graph above, the average fixed cost (AFC) curve falls as output increases due to the fact that fixed costs are a decreasing proportion of total cost as output increases. Both the average total cost (ATC) and the average variable cost (AVC) curves fall, and then rise again. The curves start to rise after a certain point because diminishing return takes place. The distance on the y-axis between the ATC and the AVC represents the value of the average fixed cost (AFC). Just like the average variable cost and average total cost curves demonstrate, the marginal cost also falls, and eventually rises again as diminishing marginal returns take place. Economies of scale, however, refer to the advantages that arise from large-scale production, which in turn results in a lower average unit cost (cost per unit). It explains the relationship between the long run average costs of producing a unit of good with increasing level of output. Unlike  diminishing returns, economies of scale is a process that operates and is caused by a development over a long period of time. Economies of scale also have many sources whereas diminishing returns is the relationship between output and only one input of production.There are two different forms of economies of scale that could occur in a firm. The first is internal economies of scale. This refers to the advantages that are caused as a result of the expanding and growth of a firm/business. Internal economies of scale can be additionally categorized into commercial, managerial, financial and technical economies of scale. Commercial economies of scale arise from the purchase of raw materials and the sale of finished goods. When the firm’s output increases, they order larger quantities of the raw materials (bulk buying) and therefore these raw material firms favour these businesses, and offer lower prices due to their ordering of higher quantities. Managerial economies of scale is a process that follows the principle of the division of labour and creates specialization due to the firm’s ability to employ specialized employees, and this causes an increase in production efficiency. A financial economy of scale is when a large firm benefits by getting better credit facilities e.g. credit at cheaper rates, being able to negotiate better finance deals etc. Finally, a technical economy of scale arises due to large-scale production because there is a technical advantage in the use of large machinery in the production process. Technical economies of scale will most likely arise due to machinery being used in the production process, which are more efficient than human labour, and also require less maintenance, training and do not require payment. External economies of scale refers to the advantages firms/businesses can get as a result of the growth of the entire industry as a whole. Usually, the industry grows due to an improvement in a specific area of the industry, such as an increase in the local’s skill and training, and improving in the training facilities themselves, which causes an increase in the quality of training for the future employees or an increase in the foreign supply of labour with a higher skillset that before.

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North Korea China’s North Korean Refugee Dilemma The current state of North Korea’s economy and policy is what has led to the explosive migration of refugees to China and South Korea. The collapse of the Soviet Union as well as the death of Kim Il Sung are two of the biggest factors leading to North Korea’s downward spiral, and the rate of defection continues to increase. The leading reason for this great migration is the serious food crisis, dismal living conditions, labor exploitation, violation of human rights, and political persecution. North Korean’s seek freedom, ironically, in China, North Korea’s biggest political ally and trading partner. As a fellow communist state sharing a border, China is well known for its hostility towards refugees. The country maintains the mindset that it has the moral obligation to return all defectors back to where they came from, where they will most likely be forced to work in concentration camps or killed, along with their families. Even defectors who are successful have the difficulty of living with insecure legal status, and risk of deportat...

Bamboozled: Black People and White Man Essay

In 2000, Spike Lee wrote and directed the film Bamboozled. When discussing his satirical film, Spike Lee claimed, â€Å"I want people to think about the power of images, not just in terms of race, but how imagery is used and what sort of social impact it has – how it influences how we talk, how we think, how we view one another[. . . ]how film and television have historically[. . . ]produced and perpetuated distorted images. † Spike Lee certainly conveyed this message in Bamboozled. Images are powerful and carry massive social impact. They should never be misrepresented. Are all African Americans either lazy or dim-witted or â€Å"happy servants†, always ready and willing to please the White Man? The short answer is, no. However, throughout the 1800s and early 1900s, many people believed this. The ultimate question is, why? As explained in the film Ethnic Notions, this false perception grew and grew, even past the time of slavery, due to images. Derogatory images of African Americans as â€Å"happy servants† or â€Å"savages,† were everywhere; they were published in children’s books and slapped on cans of food to be used as a marketing tool. People bought into this perception of African Americans, as they became acclimatized to it. Today, our society likes to believe that times have changed and there is no longer an issue of race or false perception of African Americans in the media. However, Spike Lee argues, â€Å"A new â€Å"phenomenon† has emerged in film in recent years, in which an African-American character is imbued with special powers, filmmaker Spike Lee told a student audience ? This new image is just a reincarnation of â€Å"the same old† stereotype or caricature of African Americans ? Lee cited four recent films in which there is a â€Å"magical, mystical Negro† character ? in â€Å"The Legend of Bagger Vance,† a black man â€Å"with all these powers,† teaches a young white male ? how to golf like a champion ? â€Å"How is it that black people have these powers but they use them for the benefit of white people? † Spike Lee seems to be under the impression that African Americans are still misrepresented in the media. They have only improved their ability to mask the fact. False image is still there, but it is subtle. His film Bamboozled ripped viewers’ eyes wide open. The film explored and demonstrated two images of African Americans. The first image, is the Black Man who is just like the White Man or the Asian Man or the Middle-Eastern Man; a man who can be rich and successful like Pierre Delacroix in Bamboozled; a man who can be poor and when without money will do almost anything for it like Manray and Womack. However, when Pierre Delacroix pitched television shows about a Black Man living in an upper-middle-class white, suburban neighborhood, his superior, Thomas Dunwitty turned them down, â€Å"they definitely don’t want to see dignified black people [on television]. † However, the network would allow Pierre Delacroix to create a show which blatantly degrades African Americans; a show which goes back to the 1900s, to the time of black face and minstrel shows; a time when black people were considered subhuman. This is where Spike Lee demonstrates the other image of the African American; an image that the media has gently forced down viewer’s throats. Spike Lee, however, did not do so gently. The fictional television show in Bamboozled, â€Å"Mantan’s New Millennium Minstrel Show†, starred African Americans in â€Å"black face† acting like buffoons. It might as well have been an authentic minstrel show in the 1900s. There was dancing and singing. The two main characters hid from the White Man in a chicken coup, saying â€Å"ain’t nobody in here but us chickens! â€Å"4 The creator, Pierre Delacroix’s initial intention with this show was not to degrade his own race. It was to â€Å"break the stereotypes. â€Å"5 He figured the nation would be shocked and outraged! Instead they ate it up. The studio audience dressed in black face. Children trick-or-treated in black face. It was the latest craze of the nation. Black face is an act which digs back to a time of slavery, a time where African Americans were considered inferior. It was now socially acceptable to publicly highlight a moment in history that pained African Americans. People figured it’s on TV, it’s OK! The black man was degraded, as he has always been, but in Bamboozled no mercy was spared. Spike Lee used the film in a variety of ways. He attacked today’s media and the way in which it portrays African Americans. He explored the wide scope of African American’s lives, which is no different than the lives of any other race. He demonstrated the consequences of greed and sacrificing one’s dignity. Furthermore, he exposed society for what it really is: mindless. The majority of a population does not question the media. Instead it swallows images whole, even if those images are as false and misleading as a painted black face.

Chick Fila Marketing Plan - 3447 Words

Abstract According to research, in 2005, Chick-fil-A reported sales of more than $1.975 billion. It is documented that the company had 38 years of consecutive sales increase. The award winning company has been selected 11 times for the â€Å"Choice in Chains† Customer Satisfaction award. How Mr. Cathy accomplished this great feat is the task this paper is charged to unveil. Chick fil-A is already doing what it does best, â€Å"maintaining a quality product and consistently looking for ways to improve its current menu.† However, working on menu items that are more health friendly would increase sales significantly, now that Americans are becoming more health cautious. By combing great taste with healthy food, Chick fil-A is sure to increase its†¦show more content†¦In the area of employee welfare Chick fil-A started a Leadership Scholarship Program which offers employees a $1000 scholarship to the school of their choice. Thereby encourage employees to continue their educ ation. It is noted that since the program’s inception in 1973, more than twenty million dollars in scholarships have been awarded (Press release, 2005). In the area of social responsibility this company goes above and beyond the normal protocol of community outreach. The WinShape Centre Foundation is its biggest contribution to social responsibility. This program has a summer camp for children, joint scholarships at Berry College, 12 foster homes and a new marriage-enhancement retreat started in 2003. All of these qualities have made Chick fil-A successful in several different ways, by not focusing on profits, the company has managed to bring in increased sales for 38 consecutive years. (Press release, 2005). Financial Goals Increased sale for 38 years straight says it all. In 2005, it is documented that sales reached $1.975 billion which was an increase of 13.10 percent from the previous year. When a company set its financial goals, it takes several different things into consideration. It can be hard to project future sales, on average at best a firm would like to see an increase of 3-7 percent, 13.10 is aShow MoreRelatedtruett cathy8608 Words   |  35 PagesAmerican National Business Hall of Fame, ANBHF S. Truett Cathy S. Truett Cathy Chick-Fil-A Home Laureates THE CHICK-FIL-A-STORY Fellows Journal Research Program Education Program Selection Program Museum About Contact Slide Shows Board Members Business Ethics and Social Responsibility by Dr. Richard E. Hattwick Professor of Economics (Retired) Western Illinois University Truett Cathys career story belongs in a collection of biographies labeled Christian Business Leaders