Economies of Scale

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Economies of scale is the increased efficiency when doing something on a larger scale. For example, a large store like Wal-Mart benefits from "economies of scale" so that it can provide cheaper goods than a small store can.

A more detailed explanation is this. "Economics of scale" is the decrease in a firm's long-run average costs as the size of its production increases. Reasons for such a decrease can include reduced unit costs of inputs (as in the Wal-Mart example), more efficient utilization of equipment (as in 24-hour usage), and greater specialization of resources (as in a more specialized workforce).

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