Economies of Scale

Economies of scale in an industry refers to the decrease in cost per unit that occurs in some production and service delivery settings when the production capacity increases. Basicly if unit cost is a function of the volume that a plant is capable of producing then scale economies exist in the industry.

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Copyright © 2004-06 by D. J. Power (see his home page). PlanningSkills.COM^sm is maintained by Alexander P. and Daniel J. Power. Please contact them at webmaster@dssresources.com with questions. See disclaimer and privacy statement. This page was last modified on Tuesday, June 26, 2007.