Download - Scale of production (Micro economics)
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SCALE OF PRODUCTIONITS MERITS AND DEMERITS
(MICRO ECONOMICS)Presented by
Group # 3(BBA Hons.I)Seetal Daas(Leader)
Bhawan KumarShoaib SalmanZahid HussainHaresh Kumar
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Scale of Production
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.
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Classification/Types
The Scale of production is classified as under;
(1)Small Scale Production
(2)Large Scale Production
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(1)Small Scale Production
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.
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(2)Large Scale Production
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.
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Merits of Small Scale Production
Close Supervision Nature of Demand More Employment Need of small Capital Direct relation b/w Workers and
Employers Easy Management Freedom of Work
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Demerits of Small Scale Production
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
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Merits of Large Scale Production
Division of Labor Use of machines More production Cheap and Easy Loans Standard Goods Research Economy of Buying and Selling
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Demerits of Large Scale Production
Evils of Factory System Danger of Over-Production Less Supervision Class Struggle Dependence on Foreign Market Unequal Distribution of Wealth
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