If a firm doubles its resources and generates an output level which is more than double, it is said to be experiencing economies of scale. Economies of scale are benefits that can emerge from a business's size being increased.
For instance, a company might benefit from economies of scale while making large purchases. It could bargain for a lower price per unit than its rivals by purchasing a big number of items at once. Because they can give businesses a competitive edge in their industry, economies of scale are crucial. Therefore, firm will always aim to achieve economies of scale.
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