Which of the following would most likely indicate the presence of demand-side benefits of scale in the Porter framework? (a) Consumers value being in a network with other customers. (b) The average cost of production decreases as more output is produced. © Large amounts of capital are needed to enter an industry. I believe the best answer is Choice (a). Anyone think differently?
A sounds good
A?
B ? As increased demand will result in increased production. (benefit of scale).
Goel_ar, I think Choice (b) would be correct, if we were talking about supply side economies of scale. The question is asking about demand side benefits of scale. That is why I am leaning to Choice (a).
is a demand side benefit economies of scale? that is what goel is saying. but, economies of scale benefits the producer/company/the man. a demand side benefit imo leads to the b answer. what is it?
well?
(a) Consumers value being in a network with other customers. a guess, but this seems to focus on brand affiliation. this phenomenom on the demand side diminishes the threats of new entrants and substitute products
A?