economy of scale | economics - Encyclopedia Britannica

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economy of scale, in economics, the relationship between the size of a plant or industry and the lowest possible cost of a product. When a factory increases ... economyofscale TableofContents economyofscale Introduction FastFacts RelatedContent More MoreArticlesOnThisTopic Contributors ArticleHistory Home Politics,Law&Government Economics&EconomicSystems economyofscale economics Actions Cite verifiedCite Whileeveryefforthasbeenmadetofollowcitationstylerules,theremaybesomediscrepancies. Pleaserefertotheappropriatestylemanualorothersourcesifyouhaveanyquestions. SelectCitationStyle MLA APA ChicagoManualofStyle CopyCitation Share Share Sharetosocialmedia Facebook Twitter URL https://www.britannica.com/topic/economy-of-scale GiveFeedback ExternalWebsites Feedback Corrections?Updates?Omissions?Letusknowifyouhavesuggestionstoimprovethisarticle(requireslogin). FeedbackType Selectatype(Required) FactualCorrection Spelling/GrammarCorrection LinkCorrection AdditionalInformation Other YourFeedback SubmitFeedback Thankyouforyourfeedback Oureditorswillreviewwhatyou’vesubmittedanddeterminewhethertorevisethearticle. JoinBritannica'sPublishingPartnerProgramandourcommunityofexpertstogainaglobalaudienceforyourwork! ExternalWebsites BritishBroadcastingCorporation-EconomiesofScale Print Cite verifiedCite Whileeveryefforthasbeenmadetofollowcitationstylerules,theremaybesomediscrepancies. Pleaserefertotheappropriatestylemanualorothersourcesifyouhaveanyquestions. SelectCitationStyle MLA APA ChicagoManualofStyle CopyCitation Share Share Sharetosocialmedia Facebook Twitter URL https://www.britannica.com/topic/economy-of-scale Feedback ExternalWebsites Feedback Corrections?Updates?Omissions?Letusknowifyouhavesuggestionstoimprovethisarticle(requireslogin). FeedbackType Selectatype(Required) FactualCorrection Spelling/GrammarCorrection LinkCorrection AdditionalInformation Other YourFeedback SubmitFeedback Thankyouforyourfeedback Oureditorswillreviewwhatyou’vesubmittedanddeterminewhethertorevisethearticle. JoinBritannica'sPublishingPartnerProgramandourcommunityofexpertstogainaglobalaudienceforyourwork! ExternalWebsites BritishBroadcastingCorporation-EconomiesofScale By TheEditorsofEncyclopaediaBritannica • EditHistory TableofContents RelatedTopics: production ...(Showmore) Seeallrelatedcontent→ economyofscale,ineconomics,therelationshipbetweenthesizeofaplantorindustryandthelowestpossiblecostofaproduct.Whenafactoryincreasesoutput,areductionintheaveragecostofaproductisusuallyobtained.Thisreductionisknownaseconomyofscale.Increasedlaboursupply,betterspecialization,improvedtechnology,anddiscoveryofnewresourcesorbetterimplementationofexistingonesallcanincreaseoutputandleadtoeconomyofscale.Conversely,diseconomyofscalecanresultwhenanincreaseinoutputcausestheaveragecosttoincrease.



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