ChipMaker is a company that produces computer chips. To gain an advantage over other computer chip makers, ChipMaker focuses on reducing its costs below all of its competitors and has aligned its value chain accordingly. Recently, several of ChipMaker's competitors have begun to reduce the company's competitive advantage. In response to this threat, ChipMaker has decided to add production capacity in an effort to lower costs. By increasing production volume in an effort to reduce costs, the company is pursuing which sources of cost advantage? technological advantages size differences and economies of scale first-mover advantage differential access to productive inputs

To begin with, in order to obtain an advantage in the field of business and in that way to overcome the other competitors there are differentes way of getting that. One of them, the economies of scale, focus on decreasing the cost of the production by the act of increasing the amount of goods producted. In that order, more is better, therefore that when ChipMaker decided to add production capacity in an effort to lower costs it is pursuing size differences and economies of scale.