Economies of scale: A survey of the empirical literature

economy of scale  The two concepts economies of scale and economies of size describe what happens to production or costs when the size of the firm changes As a business grows, it can experience economies of scale close economies of scale Where the average costs fall as the

Source: Internal economies of scale refer to the cost advantages a firm can achieve as a result of its own growth and expansion These cost 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

The specific way an economy of scale works depends on the goods or services being produced It may be as simple as extending operating hours to INTERNAL ECONOMIES: This happens when better use is made in factors of production within the firm and by increasing output the factors in the internal economies