Chapter 31 Economies of scale

economies of scale  Economies of scale refer to cost advantages achieved through increased production and operational efficiency, while economies of scope result In summary, internal economies of scale are firm-specific and result from actions taken by the firm itself, while external economies of scale

THE theory of the economies of scale is the theory of the relationship tween the scale of use of a properly chosen combination of all product  Purchasing Economies of scale in purchasing come from consolidating raw material sources and paring down a company's supplier base By purchasing on a global

Economies of scale serve as a potent tool for firms to gain cost advantages and expand their market presence The benefits include reduced per- 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