Technical economies of scale
Technical economies of scale
Glossary of business
Definition of technical economies of scale
An economy of scale is where average cost falls as production increases. Economies of scale are happening because larger firms are able to lower their unit costs. Technical economies of scale are the lower unit costs which come about from larger firms being able to use more efficient techniques of production and the fact that a larger plants are often cheaper to run. This is often helped by the principle of increased dimensions. For example, a ship double the size will have more than double the volume and can therefore reduce the cost of transportation per unit considerably. It will also not require double the number of crew to run it resulting in a further saving.
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Terminology about business
Job world
Definition and meaning of technical economies of scale
Meaning of technical economies of scale
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