WordNet-Online
Free dictionary and thesaurus of English. Definitions, synonyms, antonyms and more...
Hint: double-click any word to get it searched!

	Enter your search terms Submit search form
	Web www.wordnet-online.com

Definitions from WordNet

Definitions from the Web

Term: Economy of Scale

Description:

Economy of scale is a concept that refers to the cost advantages gained by businesses when they increase their production output. It suggests that as the quantity of goods or services produced increases, the average cost of production per unit decreases. This phenomenon often occurs due to the spreading of fixed costs over a larger production volume, leading to increased efficiency and profitability for businesses.

Senses and Usages:

1. Noun:
• General Sense: The ability of a company to reduce costs and enhance efficiency as production output increases.
• Example 1: The company successfully implemented economy of scale by expanding its manufacturing facilities, resulting in a significant decrease in production costs.
• Example 2: The supermarket chain was able to offer lower prices to customers due to its strong economy of scale.
• Local Sense: The unique economic conditions and factors specific to a particular region or locality.
• Example 1: The economy of scale in the agricultural sector of this region is driven by its fertile soil and favorable climate.
• Example 2: Government policies play a crucial role in promoting the economy of scale within various local industries.
2. Related Adjective: Economies of Scale
• Example 1: The company adopted an economies of scale approach to maximize its production efficiency.
• Example 2: The economies of scale strategy proved to be highly beneficial for the organization's expansion plans.

Related Products on Amazon:

• Books on Economics of Scale
• Business Efficiency Products
• Production Optimization Tools