ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Economies of scale are cost reductions that occur when companies increase production. The fixed costs, like administration, are spread over more units of production. Sometimes, a company that enjoys economies of scale can negotiate to lower its variable costs, as well.

Detailed explanation-2: -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.

Detailed explanation-3: -"Economies of scale” means that: Economies of scale means that as a company produces larger numbers of a particular product, the cost of each unit of the product goes down. When a firm produces a large quantity of a product, the cost of producing each individual unit usually goes down.

Detailed explanation-4: -The Long-run average cost curve of a firm illustrates how the cost per unit changes with output. Economies of scale means that production gets cheaper when more units are produced (up to a certain point). The savings come from spreading the cost of production over a larger number of units.

Detailed explanation-5: -Economies of scale refer to the cost advantages a company gains with the increase in production. This happens because production costs can now be spread over a large number of goods. The bigger the size of a company, the bigger the more the cost savings with the increase in production.