ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -There are two types of economies of scale: internal and external economies of scale. Internal economies of scale are firm-specific-or caused internally-while external economies of scale occur based on larger changes outside the firm.

Detailed explanation-2: -First, specialization of labor and more integrated technology boost production volumes. Second, lower per-unit costs can come from bulk orders from suppliers, larger advertising buys, or lower costs of capital. Third, spreading internal function costs across more units produced and sold helps to reduce costs.

Detailed explanation-3: -In microeconomics, economies of scale are the cost advantages that enterprises obtain due to their scale of operation, and are typically measured by the amount of output produced per unit of time. A decrease in cost per unit of output enables an increase in scale.

Detailed explanation-4: -Technical economies of scale. Technical economies of scale are a type of internal economy of scale. Purchasing economies of scale. Purchasing economies of scale, also called buying economies of scale, are a type of internal economy of scale. Financial economies of scale.