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Economies of scale is actually very simple - it explains how the costs of various things change dramatically as the volume of them rises. The general example is how the more of a product a factory makes, the less it costs to produce. As output rises, the cost of the machines to build something gets paid off, as well as other overhead expenses, and the cost of production goes lower and lower. So, the more (the SCALE) you make or there is of something, the lower the cost (the economies).

14 years ago. Rating: 1
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