Economies of scale refer to the cost advantages that a company can achieve by producing a larger quantity of goods or services. This occurs when the cost of production per unit decreases as production increases. Economies of scale can be achieved through various methods, such as increasing the efficiency of production, reducing
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. 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.