Economies & diseconomies of scale
Internal & external economies and diseconomies of scale (AO2)Economies of scale enable a business to benefit from lower average costs (the cost per unit) by increasing the size of its operations. Hence, these are often described as the cost-saving benefits enjoyed by a firm as it grows.However, diseconomies of scale will occur if the firm grows beyond its ability to operate efficiently. This causes the firm’s average...
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