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Economies of scope |
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Economies of scopeThe property that a firm's average cost falls as it produces a larger number of different products.Economies of scopeScope economies exist whenever the same investment can support multiple profitable activities less expensively in combination than separately.Economies of scope Similar MatchesEconomies of scaleEconomies of scaleAchievement of lower average cost per unit through increased production. Dynamic economies of scaleDynamic economies of scaleA form of increasing returns to scale in which average cost declines over time as producers accumulate experience, so that average product rises with total output of the firm or industry accumulated over time. See learning by doing, infant industry protection. Economies of vertical integrationEconomies of vertical integrationProduced by achieving lower operating costs by owning all components of production and sometimes sales outlets rather than contracting for companies in the outside marketplace. Economies of scaleEconomies of scaleIncreasing returns to scale. External economies of scaleExternal economies of scaleA form of increasing returns to scale in which productivity and thus costs of individual firms depend on the output of their entire industry, rather than just their own. Unlike more conventional (internal) scale economies, these are consistent with perfect competition. Further SuggestionsInternal economies of scaleDiseconomies of scale Scale economies |
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