Following a merger to expand its scale of operations, a regional airline is able to employ dedicated, specialist route-planning managers to optimize flight schedules, and it also negotiates a lower interest rate on its aircraft leasing contracts due to its larger asset base and lower risk of default.
Which types of economies of scale is the airline experiencing?
Technical and financial economies of scale
Managerial and purchasing economies of scale
Technical and purchasing economies of scale
Managerial and financial economies of scale
156 exam-style questions on AQA A Level Economics 1.4 Production, costs and revenue, covering 1.4.1 Production and productivity, 1.4.2 Specialisation, division of labour and exchange, 1.4.3 The law of diminishing returns and returns to scale (A-level only), 1.4.4 Costs of production, 1.4.5 Economies and diseconomies of scale, 1.4.6 Marginal, average and total revenue, 1.4.7 Profit, and 1.4.8 Technological change (A-level only). Each one has a worked solution and a mark scheme showing where the marks go.