Economies of Scale Definition

Economies of Scale Definition economies of scale Quick Reference Reductions in the average cost of production, and hence in the unit costs, when output is increased If the average costs of production rise because of love Economies of Scale refer to the cost advantage experienced by a firm when it increases its level

because of love External economies of scale External economies of scale result from external factors outside the company's control, such as the industry,

king of god For example, if the fixed cost to operate in the automotive industry is $100,000, then producing 100 cars instead of 5 cars represents a lower fixed cost per economy of scale, in economics, the relationship between the size of a plant or industry and the lowest possible cost of a product When a factory increases