Glossary / General

economies of scale

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Economies of scale mean that as a company makes more products, the cost to produce each one usually goes down. This is because they can spread out their fixed costs over a larger number of items.

Technical Definition

Economies of scale refer to the cost advantages that a business obtains due to the scale of its operations, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units.

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