Economies of scale

economies of scale  Economies of scale refer to the notion that average cost falls as the firm expands Conversely, diseconomies of scale occur when expansion incurs increasing The left-hand portion of the long-run average cost curve, where it is downward-sloping from output levels Q1 to Q2 to Q3, illustrates the case of economies of

Economies of Scale Internal Economies of Scale These are those which arise from the expansion of the plant size of the firm They are specific to the individual firm These are

Technical: the efficiency gains when a firm increases the scale of its operation yields lower costs per unit For example, buying a bigger factory will cost you Economies of scale are separated into internal economies of scale and external economies of scale (