What are economies of scale?

Economies of scale are when increasing output leads to lower long-run average costs- meaning that when a business increases production, their average costs decrease
There are several types of economy of scale: Risk bearing, Managerial, Financial, Purchasing, Technical, Marketing 
For example, purchasing economies of scale are likely to occur as when a company is grows, their market share increases, and are therefore more able to negotiate prices with their suppliers, meaning that average costs would fall 

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