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Internal economies of scale |
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Internal economies of scaleEconomies of scale that are internal to a firm; that is, the firm's average costs fall as its own output rises. Likely to be inconsistent with perfect competition. Contrasts with external economies of scale.Similar MatchesEconomies of scopeEconomies of scopeScope economies exist whenever the same investment can support multiple profitable activities less expensively in combination than separately. 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. 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. Scale economiesScale economiesIncreasing 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 SuggestionsEconomies of scaleEconomies of scale Diseconomies of scale Economies of scope |
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