Describe what is economies of scale?

So economies of scale is an economic theory which explains why large firms tend to have cheaper per unit costs than smaller companies. The theory basis its ideas around a few key issues. There are many ways to achieve economies of scale. The definition is when unit costs fall as output rises. Below are a few examples how companies can achieve economies of scale. Technical economies of scale is when Large-scale businesses can afford to invest in expensive and specialist capital machinery. This will increade output without increasing unit costs as much hence in the long run achieving economies of scale.

HU
Answered by Hassan U. Economics tutor

2398 Views

See similar Economics GCSE tutors

Related Economics GCSE answers

All answers ▸

Which one of the following is the most likely consequence of an increase in the division of labour in the production of smartphones?


Explain what the possible results could be from increasing the Euro/US dollar exchange rate (you are Euro)


What are causes of globalisation?


Please explain the concept of price elasticity of demand


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2026 by IXL Learning