What are economies of scale?

Economies of scale can be both internal and external. Internal economies of scale are based on management decisions, while external ones have to do with outside factors. Internal functions include accounting, information technology, and marketing, which are also considered operational efficiencies and synergies.

What are the benefits of economies of scale?

Taking advantage of economies of scale can have a number of benefits - it can enable companies to become more price competitive, make production processes more efficient, and improve profits. There are two main types of economies of scale:

How do companies achieve economies of scale?

Companies can achieve economies of scale by increasing production and lowering costs. This happens because costs are spread over a larger number of goods. Costs can be both fixed and variable. Economies of scale are cost advantages companies experience when production becomes efficient, as costs can be spread over a larger amount of goods.