Home > Term: economies of scale
economies of scale
Bigger is better. In many industries, as output increases, the average cost of each unit produced falls. One reason is that overheads and other fixed costs can be spread over more units of output. However, getting bigger can also increase average costs (diseconomies of scale) because it is more difficult to manage a big operation, for instance.
- Part of Speech: noun
- Industry/Domain: Economy
- Category: Economics
- Company: The Economist
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- summer.l
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