Blog #2

If outputs are increased more than the inputs then you have an increase in return. Simply put, if a company expands by 50 percent and the result from that expansion leads to a 75 percent in output it would be an increase in return. Companies such as Google are a good example of this. They receive an increase in return with almost every expansion. Production recognition plays a significant role in this concept. Which further explains why Google is successful. The name alone is enough to sell a product, no matter what the product is. Economic of scale is viewed as being similar but it has a different concept. Economic of scale is the concept of perceiving that expansion will mean more sales. The cost per unit is decreased as the fixed cost is increased. Companies such as Sams Club and Costco have made a complete business out of this concept. But it doesn't stop there. You can go into almost any retail store and you will find bundle deals. Whether it be saving 50 cents by buying an extra tube of toothpaste at Walmart, or signing up for the 20 gig data plan at Verizon. Economist like Economic of scale because of its predictability.