Chapter 31 – Economies of scale

economies of scale  Economies of Scale Examples Supermarkets are the most common example of economies of scale Since they buy goods in bulk, they avail discounts  Economies of scale means a business has decreased cost-per-item while increasing their output Diseconomies of scale means that a company is facing increased

These are the benefits of Economies of Scale When there is a massive expansion in an organisation, the cost per unit may increase with the increase in output  The left-hand portion of the long-run average cost curve, where it is downward-sloping from output levels Q1 to Q2 to Q3, illustrates the case of economies of

Economies of scale means a business has decreased cost-per-item while increasing their output Diseconomies of scale means that a company is facing increased Economies of scale are cost advantages reaped by companies when production becomes efficient