What is economies of scale ? Please explain me in detail i m getting difficulty to understand the concept .
Dear student,
Economies of scale refer to the benefit that a firm get by expanding its production capacities, output or size. When a firm produce in large scale then it gets cost advantage, i.e. the cost per unit of product falls. Economies of scale is achieved by firms usually in long run. In long run, when production is done at large scale, the overall wastage reduce which leads to reduction of cost.
Regards
Economies of scale refer to the benefit that a firm get by expanding its production capacities, output or size. When a firm produce in large scale then it gets cost advantage, i.e. the cost per unit of product falls. Economies of scale is achieved by firms usually in long run. In long run, when production is done at large scale, the overall wastage reduce which leads to reduction of cost.
Regards