A-Z Popular Blog Economics Search »
Related Topics

6 Examples of Scale

 , April 16, 2016 updated on April 03, 2018
Scale is amount of production a nation or firm achieves. This can apply to production of a product or the delivery of a service or experience. The following are illustrative examples of scale.

Economies of Scale

A firm that enjoys economies of scale has falling cost per unit as they produce more units. This gives large firms in an industry a lower unit cost than smaller competitors. Economies of scale can also apply to services or experiences as they scale up sales volumes. For example, a theme park finds that its cost per visitor is $60 with less than 5,000 visitors but falls to below $10 with 50,000 visitors or more.

Comparative Advantage

Economies of scale can be applied at the level of nations. For example, a nation that produces 25 million tonnes of wheat a year may have far lower costs per ton than a nation that produces 1 million tonnes a year. A nation has a comparative advantage in wheat if its opportunity costs for producing wheat are lower than its trading partners.

Diseconomies of Scale

Diseconomies of scale is a firm that faces increasing unit costs as is scales up. For example, a gold mine that can cheaply mine 5,000 ounces of gold each year with escalating costs to increase production further.

Constant Scale

In some cases, increasing sales volumes have no impact on your costs. For example, a small ecommerce seller who can only procure items at a fixed cost.

Niche Scale

In an industry with strong economies of scale it is difficult for a small firm to compete directly with larger firms as they have lower unit costs. One strategy to deal with this is to offer a niche product or service. For example, a small tea shop that has far higher units costs than local supermarkets thrives by selling rare, specialty and high quality teas both in their shop and on ecommerce sites.


The other way for a smaller competitor to compete with a firm that enjoys greater economies of scale is to increase quality so as to charge a premium price. For example, a craft beer that incorporates local ingredients and traditions has a unit cost of $3 a bottle in a country where larger competitors have unit costs below $1. The craft beer competes on quality as they can't match the prices of the larger firms.
Overview: Scale
DefinitionThe amount of production a firm achieves.
Related Concepts


This is the complete list of articles we have written about economics.
Added Value
Advanced Economy
Adverse Selection
Animal Spirits
Attention Economics
Bargaining Power
Barriers To Entry
Behavioral Economics
Behavioral Finance
Bounded Growth
Bounded Rationality
Business Cluster
Business Value
Capital Flight
Capital Goods
Circular Economy
Club Theory
Comparative Advantage
Competitive Parity
Cost Competition
Critical Mass
Customary Pricing
Deadweight Loss
Division Of Labor
Economic Activity
Economic Advantage
Economic Bad
Economic Context
Economic Development
Economic Growth
Economic Infrastructure
Economic Problems
Economic Sector
Economic Systems
Economic Theories
Economies Of Density
Economies Of Scale
Experience Economy
Extreme Value Theory
Factors Of Production
Failure Demand
Fiscal Dominance
Free Market
Gains From Trade
Giffen Good
Income Distribution
Industrial Complex
Industrial Economy
Inferior Good
Information Asymmetry
Intangible Goods
Intangible Value
Knowledge Economy
Labor Productivity
Long Tail
Marginal Utility
Market Conditions
Market Economy
Market Failure
Market Forces
Market Power
Marketing Economics
Mean Regression
Media Economics
Merit Good
Middle Class
Monetary Policy
Plateau Effect
Predatory Pricing
Price Economics
Price Umbrella
Price War
Pricing Strategy
Profit Motive
Rational Choice Theory
Rent Seeking
Rule Of Three
Search Good
Service Economy
State Capitalism
Sticky Prices
Superior Goods
Supply Shock
Sustainable Economics
Switching Barriers
Threat Of Substitutes
Trade War
Traditional Economy
Unsought Goods
Value Creation
Veblen Goods
Zero-sum Game
If you enjoyed this page, please consider bookmarking Simplicable.


Everyday examples of economics.

Trade War

An overview of trade wars with examples.

Market Conditions

The common types of market conditions.

Free Market

A complete overview of free markets.


The definition of macroeconomics with examples.

Information Economics

The definition of information economics with examples.

Market Forces

The primary forces that shape competition in a market.

Traditional Economy

A complete overview of traditional economies with examples.

Developed Country

The definition of a developed country with an overview of common characteristics.

Business Models

A list of common business models.

Creative Services

The definition of creative services with examples.

Business Value

The definition of business value with examples.

Consumer To Consumer

The definition of consumer to consumer with examples.

Service Economy

The definition of service economy with examples.


The definition of recommerce with examples.

Service Industry

The definition of service industry with examples.

Gig Economy

A complete overview of the gig economy with examples.

Club Goods

The definition of club goods with examples.
The most popular articles on Simplicable in the past day.

New Articles

Recent posts or updates on Simplicable.
Site Map