Economics of scale means percent % change in average cost of production following a 1% increase in output.
Economics of scale gives rise to lower per unit cost of several reasons. First, specialization of labor and more integrated technology boost production volumes. Second, lower per unit cost can come from bulk order from suppliers, larger advertising price buys or lower cost of capital.
Example: In a hospital, it is still a 20-minute visit with a doctor, but all the business overhead costs of hospital system are spread across more doctor visits and the person assisting the doctor is no longer a degrees nurse, but a technician or nurse aide.
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