economies of scale



  • plural noun the cost advantages of a company producing a product in larger quantities so that each unit costs less to make.


  • plural noun a situation in which a product is made more profitable by manufacturing it in larger quantities so that each unit costs less to make.

Health Economics

  • (written as Economies of Scale)
    This is a result of increasing returns to scale: the amount of resource used per unit of output falls at higher output rates. It implies a falling unit cost as output rates increase, as long as input prices do not increase so as to offset the scale effect, as they might if the organization in question is a principal user of a resource and there is a degree of monopsony. Diseconomies of scale are the contrary phenomenon. In hospitals, it has usually been found that the average cost curve has a shallow 'U' shape with the lowest point around 200 beds. Some studies have found modest scale economies.

Information & Library Science

  • noun achieving savings by producing very large quantities

Media Studies

  • plural noun the savings that can be made per unit by producing larger quantities of a product, e.g. by reducing wastage