What is Economies of scale?
In [[economics]], '''economies of scale''' means that when more units of a [[Product (business)|product]] are made at the same time, the cost it takes to produce a single unit will go down. When making a product, there is a maximum capacity that can be made, at a given time. This capacity depends on the ways in which the product is made. If it is made by [[Machine|machines]], these machines have a maximum number they can produce. Wanting to produce more than this number means new machines (or a new way to make these products) are needed. [[Adam Smith]] first had this idea of economy of scale, which he obtained through [[division of labour]].<ref>{{cite book|url=https://archive.org/details/economicsprincip00osul|title=Economics: Principles in Action|last1=O'Sullivan|first1=Arthur|last2=Sheffrin|first2=Steven M.|date=2003|publisher=Pearson Prentice Hall|isbn=978-0-13-063085-8|location=Upper Saddle River, NJ|pages=[https://archive.org/details/economicsprincip00osul/page/n173 157]|author-link=Arthur O'Sullivan (economist)|url-access=limited}}</ref> The opposite of economies of scale are [[diseconomies of scale]]. == References == {{Reflist}}{{Stub}} [[Category:Economics]]