Previous Card
Dividend Policy Strategy
Economies of Scale
Cost advantages obtained by increasing the volume of production, leading to a decrease in the average cost per unit of output. ✨
Article Points:
1
Average cost per unit decreases as production volume increases.
2
Sources include technical (specialization, indivisibilities), managerial, financial, marketing, and purchasing economies.
3
Internal economies of scale arise from within the firm; external from industry growth.
4
A key source of competitive advantage and a barrier to entry for new firms.
5
Diseconomies of scale occur when a firm becomes too large, leading to rising average costs (e.g., bureaucracy).
6
Crucial for strategic decisions on growth, pricing, and competitive positioning.
Source:
Economies of Scale
Economies of Scale
No Mindmap Data
Source:
Economies of Scale