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    To what extent might economies of scale arise in the provision of rail infrastructure? (10 Marks)

    I don't really understand it, could someone give tell me a reason why this might occur?
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    Answer=

    Define: Ec of sc are the advantages from increasing in size, most notably in reducing LRAC

    Possible Economies of Scale

    Technical - they get bigger, they are able to invest more money into better railtrack..from using profits etc.

    Managerial - increasing market share, means they have a better infrastructure for attracting new managers - through head hunting. Aspirational people will want to work for the rail provider as well.

    Financial Economies - increase in size usually makes companies more credit worthy. they have access to better loan deals and rates.
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    (Original post by Andrew_2006)
    Answer=

    Define: Ec of sc are the advantages from increasing in size, most notably in reducing LRAC

    Possible Economies of Scale

    Technical - they get bigger, they are able to invest more money into better railtrack..from using profits etc.

    Managerial - increasing market share, means they have a better infrastructure for attracting new managers - through head hunting. Aspirational people will want to work for the rail provider as well.

    Financial Economies - increase in size usually makes companies more credit worthy. they have access to better loan deals and rates.
    But why are these likely to arise?
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    (Original post by robotic_dancer)
    But why are these likely to arise?
    For a start, think about the sheer quantity of raw materials and construction required in the provision and maintenance of rail infrastructure.
 
 
 
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