An Ontario based LTL Carrier has been acquired by a National TL Carrier. This acquisition will
help the National TL Carrier in achieving cost proficiency. This is on the grounds that acquisitions
prompt economies of scale. As the parent firms amalgamate to frame a greater new firm the size
of activities of the new firm increments.
Economies of scale are factors that causes the average cost of producing something to fall as the
volume of its output increases.
The newly formed company will achieve a number of economies of scale. These are following:
1. Cost effectiveness
2. Technical economies of Scale
3. Specialization of the workforce
4. Marketing
Economies of scale, however have a different side to it called the diseconomies of scale. The