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- Definition of Economies of ScaleIn microeconomics, economies of scale are the cost advantages that enterprises obtain due to their scale of operation and are typically measured by the amount of output produced per unit of... More
- Types of Economies of Scale
- Internal Economies of Scale
- External Economies of Scale
What is Economies of Scale?
Economies of scale are the cost advantage or benefit a firm or an industry derives, as a result of the expansion of its scope of production, and are typically measured by the amount of output produced per unit of time.
Types of Economies of Scale:
1. Internal economies of scale.
2. External economies of scale.
Internal Economies of Scale:
Internal economies, also known as large-scale production, refers to the benefit of a firm or industry, derived as a result of an internal increase in the level of output, or production.Â
Advantages of Internal Economics of Scale:
1. Technical Economies: Large-scale production enables firms to use advanced plants, and machines, which can double the firm’s output. It ensures the optimum use of resources and utilization of plants and machinery to full capacity.
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