Difference between revisions of "Economies of scale"
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| − | Economies of scale | + | Economies of scale refer to the status in a production process when a form increases its product output, it decreases production costs. In general any production process consists of fixed costs and variable (production volume related) costs. With more output the fixed costs are relatively lower and hence the advantage. High economies of scale exist in industries with high fixed costs and low variable costs. |
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| + | <img src="/static/files/MBI/Module%208/economiesofscale.PNG" width=600> | ||
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[[Category:marketing]] | [[Category:marketing]] | ||
Latest revision as of 19:48, 27 August 2020
Economies of scale refer to the status in a production process when a form increases its product output, it decreases production costs. In general any production process consists of fixed costs and variable (production volume related) costs. With more output the fixed costs are relatively lower and hence the advantage. High economies of scale exist in industries with high fixed costs and low variable costs.
