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Economies Of Scale | Send-To | Print | More
Category: Business & Economy | Editor's Choice | 1772 views
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© Economic Research Service
Production exhibits economies of scale if average (per unit) costs fall as output increases, and diseconomies of scale if average cost increases as output increases. Scale economies can occur at the level of individual plants or farms, in which case they generally reflect elements of the production process within a plant or farm. Scale economies at the level of a firm may also reflect elements of marketing and distribution costs. Scale economies and diseconomies are sometimes further distinguished as technological, reflecting changes in input use as output expands, or pecuniary, reflecting changes in prices paid for inputs as output expands.
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