ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The greater the quantity of output produced, the lower the per-unit fixed cost. Economies of scale also result in a fall in average variable costs (average non-fixed costs) with an increase in output. This is brought about by operational efficiencies and synergies as a result of an increase in the scale of production.

Detailed explanation-2: -Economies of scale means reduction in unit of production. Economies of scale refers to reduced cost per unit that arise from increased total output of a product. Was this answer helpful?

Detailed explanation-3: -Economies of scale exist when long run average total cost decreases as output increases, diseconomies of scale occur when long run average total cost increases as output increases, and constant returns to scale occur when costs do not change as output increases.

Detailed explanation-4: -Economies of scale are cost advantages reaped by companies when production becomes efficient. Companies can achieve economies of scale by increasing production and lowering costs. This happens because costs are spread over a larger number of goods. Costs can be both fixed and variable.