Economies and Diseconomies of scale

Economies of scale

Economies of scale is when there is a reduction in long term cost when the business grows

Types of economies of scale

–        Internal economies of scale

–        External economies of scale

 

Diseconomies of scale

Diseconomies of scale is when there is an increase in long term cost when the business grows

Types of diseconomies of scale

–        Internal diseconomies of scale

–        External diseconomies of scale