|Overview: Economies Of Scale|
|Definition||The tendency for costs to drop as you produce more of a product or service.|
|Value||Scaling is often a strategy to build a cost advantage over competitors.|
|Related Techniques||Economies Of Scope|
top » economics » scale » economies of scale
What are Economies Of Scale?
John Spacey, November 16, 2015 updated on April 03, 2018
Economies of scale is a product or service that drops in cost as you produce more. This is often due to the dilution of fixed costs such as property, plant and equipment. In many industries, large firms have a cost advantage over small firms due to economies of scale. At the level of an individual company, economies of scale may hit a limit when your existing equipment reaches full capacity. In other cases, firms are able to continue to scale until they produce as much as the market can absorb at a given price level.
EconomicsThis is the complete list of articles we have written about economics.
If you enjoyed this page, please consider bookmarking Simplicable.
Economic TheoriesA list of economic theories that are particularly useful for business.
The tendency for people at high risk to buy insurance.
A list of economic positions or capabilities that allow you to outperform in a particular industry.
Knowledge WorkA definition of knowledge work with examples.
ProductionA definition of production with examples.
An overview of post-scarcity.
Economic InfrastructureThe common types of economic infrastructure.
The common types of business competition.
InefficiencyThe common types of inefficiency.
An overview of supply with common examples.
Alpha vs Beta
The difference between two common investment measurements.
Regression Toward The Mean
An overview of Regression Toward The Mean.
Efficient Market HypothesisAn overview of the Efficient Market Hypothesis.
An overview of animal spirits, a theory of investing.
Financial MarketsA definition of financial market with examples.
A definition of Mr. Market, an investing theory.
A definition of organic growth with examples.
The common types of concept company.
Information CostsA definition of information costs with examples.
The definition of channel check with examples.
TrendingThe most popular articles on Simplicable in the past day.
New ArticlesRecent posts or updates on Simplicable. Site Map
Quality Of Life
© 2010-2023 Simplicable. All Rights Reserved. Reproduction of materials found on this site, in any form, without explicit permission is prohibited.
View credits & copyrights or citation information for this page.