Economies of Scale

Economies of scale an economics term that describes a competitive advantage that large entities have over smaller entities . It means that the larger the business ,non -profit or government , the lower it's costs 

Example: Supermarket

Supermarket can benefit from economies of scale because they can buy food in bulk and get lower average cost. If you had a delivery of just 100 cartoons of milk the average cost is quite high . The marginal cost of delivery 10,000 cartoons is quite low.you still need to pay only one driver the fuel cost will be similar , True you may need a bigger van , but the average cost of transporting 10,000 is going to be a lot less than transporting 100.