How does economies of scale make products cheaper?

Economies of scale refer to the cost advantages that a business can achieve by increasing its production. This is because, as production increases, unit costs decrease due to the increased efficiency of the process. As a result, the cost of the product decreases, making it more affordable for consumers. Economies of scale can also be achieved through bulk purchasing of materials and supplies, which reduces the cost of each individual product. By taking advantage of economies of scale, businesses can provide consumers with cheaper products, making them more affordable and accessible.

Written by

John Smith, Apr, 19 2023