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economy of scale

/ɪˈkɑnəmi əv skeɪl/
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Other forms: economies of scale

When a business grows larger and its cost per product goes down, that's an economy of scale.

Economies of scale mean that it often makes financial sense for a company to expand. By investing in new factories, larger stores, more employees, or updated technology, a business can often cut down on the cost of the goods it produces or sells. If it's less expensive to buy a book from a giant online retailer than at your neighborhood bookstore, it's probably because of an economy of scale.

Definitions of economy of scale
  1. noun
    the saving in cost of production that is due to mass production
    see moresee less
    type of:
    economy, saving
    an act of economizing; reduction in cost
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