What are 'economies of scale'?
Mar 27, 2023, Posted by : Nia Latham
Economies of scale are cost advantages that result from a company's large size. By operating on a large scale, businesses can produce goods and services more quickly and at a lower cost than smaller companies. This allows them to increase their profits and expand their operations. Economies of scale also create a competitive advantage, as larger companies can outspend smaller ones on advertising, research and development, and product development. Companies that can take advantage of economies of scale can become more successful in their industry, as well as in the global market.
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What are the different types of internal economies of scale?
Mar 10, 2023, Posted by : Nia Latham
Internal economies of scale refer to the cost savings that companies can achieve by increasing their production size. These cost savings come from lower costs per unit of production, improved quality, and more efficient use of resources. There are four main types of internal economies of scale: technical, financial, managerial, and marketing. Technical economies of scale relate to improvements in technology and processes that reduce production costs, while financial economies of scale involve the use of debt and equity to reduce the cost of capital. Managerial economies of scale refer to improved efficiency in the management of production, while marketing economies of scale refer to the cost savings from increased sales and market share.
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