Economies of scale
The decrease in the marginal cost of production as a firm's scale of operations increases. | ||||
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Economies of Scale definition was found in categories: Business & Finance(3) Science & Technology(1) Encyclopedia(1)
Economies of Scale Definition from Business & Finance Dictionaries & Glossaries
| MONASH Marketing Dictionary |
Economies of Scale
reductions in the price per unit of marketing or manufacturing a product as the quantity marketed or produced increases.
reductions in the price per unit of marketing or manufacturing a product as the quantity marketed or produced increases.
| BTS Transportation Expressions |
Economies of Scale
Cost reductions or productivity efficiencies achieved through size-optimization in relation to operational circumstances. For example, commodity freight rates usually decline as the volume of cargo tonnage shipped increases. (MARAD1)
Cost reductions or productivity efficiencies achieved through size-optimization in relation to operational circumstances. For example, commodity freight rates usually decline as the volume of cargo tonnage shipped increases. (MARAD1)
| Raynet Business & Marketing Glossary |
Economies of Scale
cost savings associated with size; the largest companies are able to buy and sell at the lowest price (see dis-economies of scale).
cost savings associated with size; the largest companies are able to buy and sell at the lowest price (see dis-economies of scale).
Economies of Scale Definition from Science & Technology Dictionaries & Glossaries
| Glossary Of Geography |
Economies of Scale
Savings achieved in the cost of production by larger enterprises because the cost of initial investment can be defrayed across a greater number of producing units.
Savings achieved in the cost of production by larger enterprises because the cost of initial investment can be defrayed across a greater number of producing units.
Economies of Scale Definition from Encyclopedia Dictionaries & Glossaries
| Wikipedia English - The Free Encyclopedia |
Economies of scale
Economies of scale characterizes a production process in which an increase in the scale of the firm causes a decrease in the long run average cost of each unit.
Economies of scale can be enjoyed by any size firm expanding its scale of operation. The common ones are purchasing (bulk buying of materials through long-term contracts), managerial (increasing the specialization of managers), financial (obtaining lower-interest charges when borrowing from banks and having access to a greater range of financial instruments), marketing (spreading the cost of advertising over a greater range of output in media markets). Each of these factors reduces the long run average costs (LRAC) of production by shifting the short-run average total cost (SRATC) curve down and to the right.
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Returns to scale
In economics, returns to scale and economies of scale are related terms that describe what happens as the scale of production increases. They are different terms and are not to be used interchangeably.
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