Economies of scale definition

Economies of scale means mass purchasing of goods or services, which results in lower average costs.

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Economies of scale means that as a company produces larger numbers of a particular product, the cost for each unit of the product goes down.

Economies of scale means that as a company produces more of a product the total cost of production goes up.

Examples of Economies of scale in a sentence

Economies of scale have been achieved through centralised administrative functions such as ticketing, financial administration and staffing, as well as greater operational flexibility between venues.
Economies of scale was another motive which although did not come out directly from the respondents was stated as one of the major reasons as to why few academic institutions pulled out of the agreement or remained inactive owing to the fact that they could not attract the required number of students to enroll in the JKUAT programmes as agreed.
Economies of scale imply that unit cost falls as the aggregate output increases.
Economies of scale could be done on the supply of raw materials, spare parts and new equipment.
Economies of scale could be done on all the previous expenditures.

More Definitions of Economies of scale

Economies of scale means that:

Economies of scale means a broader base in terms of size for the loading and distribution of those costs and expenses, thus giving the Fund a differential bargaining position with the fund’s various service providers.

Economies of scale means that as a company produces more of a product the cost of each unit produced goes down.

Economies of scale means the availability of a base of wider scale to bear and distribute such costs and charges and, hence, give the Fund a preferential negotiation position with different service providers of the Fund.

Economies of scale means exist when the average total cost (AC) of the firm decreases with the volume of production. One common source of economies of scale in telecommunications industry is the significant fixed costs that are incurred regardless of the output units. When output expands, average fixed costs will decline and may result in economies of scale.

Economies of scale means the tendency for unit costs to be lower with larger output. It helps a country to shift resources towards the production of a restricted number of goods, which increases output and reduces unit cost. Meanwhile, by engaging in international trade, it creates an integrated market larger than any other countries’ markets. See: Krugman, P and Obstfeld,M. (1997) International Economics: Theory and Policy, 4th edition, Massachusetts.

Economies of scale means the greater level of production, the cheaper the cost per unit. And while large-scale production can mean production at a lower cost, it often undermines local production in developing countries, and increases dependence on export crops.