Economies of scale | Economics | Research Starters (opens in new tab)

Economies of scale refer to the phenomenon where the cost per unit of production decreases as the volume of output increases. This concept is rooted in the idea that larger production scales allow for the spreading of fixed costs over more units, which lowers the average cost. Efficient operations often come with increased scale, enabling companies to invest in advanced technologies and hire specialized managers, which further reduces variable costs. The origins of this concept can be traced ...