Economies of scale means the percentage change cost of production with the increase in one percentage of output. In other words, in microeconomics economies of scale is a situation where cost per unit reduces with increase in scale.
When the firm's marginal cost of production decrease then Economies of Scale occurs. And there are two types of Economies of scale.
1. Internal Economies of Scale.
2. External Economies of Scale.
1. Internal Economies of Scale.
2. External Economies of Scale.
Internal Economies focus on the advantages that a firm gets due to the use of modern techniques...
External Economies advantages that a firm gets because of external factors.
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