Lesson Plan

• Identify the main causes of internal economies of scale.
• Identify the main causes of external economies of scale.
• Explain examples of internal and external diseconomies of scale.
• Compare how these factors affect a firm’s average cost curve.

• Projector and screen
• PowerPoint slides summarising each type of economy/diseconomy
• Printed handout with the summary table
• Whiteboard and markers
• Sticky notes for group case‑study activity

Start with a quick poll: “What costs do you think fall when a business grows?” Connect responses to the classic U‑shaped average‑cost curve they have already studied. Explain that today they will pinpoint why those cost changes happen and how they can become disadvantages.

1. Do‑now (5'): Students complete a short exit‑ticket from the previous lesson on AC curves.
2. Mini‑lecture (10'): Define internal vs. external economies and diseconomies; show diagram of the U‑shaped curve.
3. Group case‑study (15'): Each group receives a firm scenario and uses sticky notes to map internal economies, then presents one example.
4. Whole‑class input (10'): Teacher adds external economies/diseconomies with real‑world examples (Silicon Valley, congestion, etc.).
5. Check for understanding (10'): Quick Kahoot quiz covering causes and examples; discuss any misconceptions.
6. Wrap‑up (5'): Summarise key points on the board.

Recap the four categories of economies and diseconomies and how they shift the average‑cost curve. Students complete an exit ticket: list one internal and one external factor that could turn an economy into a diseconomy. For homework, they research a local industry and identify at least two external economies and two external diseconomies.