What are economies of scale?
What are economies of scale?
Economies of scale are the cost advantages a firm gains as it produces on a larger scale, causing its average cost to fall. Average cost is the cost of each unit, calculated as total cost divided by output.
Step-by-step lessons on OCR GCSE Economics 2.6.6 Economies of scale. Each one builds up to exam-style questions. Build a solid grasp of supply and demand and cost/revenue calculations before tackling the evaluation-heavy policy topics.