economies of scale

listen to the pronunciation of economies of scale
İngilizce - Türkçe
ölçek ekonomileri
İngilizce - İngilizce
: The characteristics of a production process in which an increase in the scale of the firm causes a decrease in the long run average cost of each unit
The decrease in the marginal cost of production as a plant's scale of operations increases
A decrease in the per unit cost of production as a result of producing large numbers of the good
Savings achieved in the cost of production by larger enterprises because the cost of initial investment can be defrayed across a greater number of producing units
a situation in which long-run average total cost declines as the output of a firm increases (also called increasing returns to scale) (chapters 8 and 12)
Economies of scale occur when larger firms are able to lower their unit costs This may happen for a variety of reasons A larger firm may be able to buy in bulk, it may be able to organise production more efficiently, it may be able to raise capital cheaper and more efficiently All of these represent economies of scale
Reductions in cost which arise from the utilisation of larger sets of machinery and equipment
Economies of scale are the financial advantages that a company gains when it produces large quantities of products. Car firms are desperate to achieve economies of scale
Cost savings in production, purchasing or support functions realized by combining organizations and achieving higher volumes
Reductions in the cost of producing a unit of a product that occurs as the output increases
the larger the organization, the lower the cost per unit to reach the marketplace; at a certain size, diseconomies of scale can set in
If all the inputs in a production process are increased and the output increases by proportionately more than the inputs were increased, economies of scale are being realized There may also be diseconomies of scale which occur when an increase in all inputs brings about a less than proportionate increase in output
Economic principle that as the volume of production increases, the cost of producing each unit decreases
Situation by which the average per square foot cost of construction declines as building size and volume expands
The benefit that larger production volumes allow fixed costs to be spread over more units lowering the average unit costs and offering a competitive price and margin advantage Producing in large volume often generates economies of scale The per-unit cost of something goes down with volume because vendors charge less per unit for larger orders, and often production techniques and facilities cost less per unit as volume increases Fixed costs are spread over larger volume
Advantages realized when combining of loads or services results in decreased average long-run costs
Economies of scale exist where the industry exhibits decreasing average long-run costs with size
A decrease in unit costs because of the volume
Efficiencies associated with larger-scale operations For example, it might cost a manufacturer $100 to manufacture one unit, $180 for two units, $240 for three units, and so on, such that the average cost per unit decreases as production volume increases
A situation in which a 1% increase in all inputs into production leads to more than a 1% increase in output
refers to a graph that features at the right bottom of FundScope's Mutual fund Summary Reports It shows the trend of each fund's MER compared to asset size If MER decreases as a result of asset growth, unitholders are considered to have benefited from economies of scale On the other hand, a stable or higher MER means that the fund company has reaped the full benefit of economies of scale and has not shared any of this benefit with investors
Unit cost reductions which result from increasing total output
Average costs decrease with increased size and distribution of product "Economies that arise from increasing the size of an operation; in the case of distance education, economies that arise from increasing the number of students " (See Inglis, Ling, & Joosten (1999) pp 44, 198 and Moore & Kearsley (1996) pp 73-74)
situations in which the long-run average costs of a firm decline as output increases (Folland et al , 1997) (S5, I) chinese | russian
reductions in unit costs arising from large-scale production
Effect on unit cost of producing large quantities In distance education the larger the number of users of a course or the larger the number of users of the system, the lower the cost for each person
Cost reductions or productivity efficiencies achieved through size-optimization in relation to operational circumstances For example, commodity freight rates usually decline as the volume of cargo tonnage shipped increases
economies of scale