00:01
When we're talking about economies of scale, i'm talking about economies of scale, we are referring to the idea that as the quantity increases, the cost per unit, the average cost decreases.
00:13
So in our long -run average cost curve, if we have money on the y -axis, we have quantity on the x -axis, and we're a long -run average cost, until this minimum, as the quantity increases, the average cost decreases, the average cost decreases.
00:30
The cost per unit decreases.
00:33
So this is where we have economies of scale.
00:36
So when we're talking about our taxi industry, when we increase the number, increase the number of taxis, increase the quantity of taxes, taxis, is there actually a decrease in the cost? decrease in the average cost.
00:56
Well, let's think about it.
00:57
When you have to hire more, when you bring in more taxis, you incur a few costs.
01:02
You get more taxi drivers.
01:05
You have to pay for labor...