Economies of scale

Cost advantages obtained via scale of operation

In microeconomics, economies of scale are the cost advantages that enterprises obtain due to their scale of operation, and are typically measured by the amount of output produced per unit of cost (production cost). A decrease in cost per unit of output enables an increase in scale that is, increased production with lowered cost. The basis of economies of scale may be technical, statistical, organizational or related factors to the degree of market control.

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