| Economies of scale: | when a business grows and the average cost of production falls |
Purchasing
economy of scale: | when a business buys goods in bulk and benefits from the discount |
Marketing
economy of scale: | when a business grows and the average cost of advertising per unit falls |
Technical
economy of scale: | when a business invests in new technology and is able to increase production. As a result, production costs per unit will fall |
Financial
economy of scale: | when a large business can borrow money at a lower rate of interest than a smaller business |
Managerial
economy of scale: | when a large firm can employ specialist workers to complete tasks and can spread the cost |
