Learning outcomes
Introduction
Commercial economies of scale purchasing
Commercial economies of scale marketing
Technical economies of scale
Financial and managerial economies of scale
Crossword
Glossary

Economies of Scale

Commercial economies of scale - marketing

As a firm grows, the cost of advertising per unit will fall. Calculate the advertising cost per unit for each business below.

A small business is charged the same price for advertising as a large business; however a large firm will have a greater volume of output over which to spread the cost. This is known as marketing economies of scale.

As a firm grows, the average cost of advertising per unit will fall.





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