______________________________________________________Parent Node(s): ASC Glossary on Cybernetics
previous ---------- next
ECONOMY OF SCALE
Relative saving realized when the size of a
plant, enterprise, etc., is increased. For example, lower
production cost of an automobile due to production of a large
number of cars of the same type is due to economy of scale.
There may also exist a DISECONOMY OF SCALE where the increased
size contributes to an increase in unit cost.