Economies of Scale

In microeconomics, economies of scale are the cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output decreasing with increasing scale. Companies achieve economies of scale by increasing production and lowering costs. This occurs because costs are spread over a larger number of goods. Costs in economies of scale are both fixed and variable.

Further Reading

  • Are there economies of scale in underwriting fees? Evidence of rising external financing costs – [PDF]
  • Economies of scale and economies of scope in multiproduct financial institutions: Further evidence from credit unions – [PDF]
  • The timing and terms of mergers motivated by economies of scale – [PDF]
  • Economies of scale and local government finance – [PDF]
  • Economies of scale in financial institutions: A study in life insurance – [PDF]
  • Economies of scale and scope at large commercial banks: Evidence from the Fourier flexible functional form – [PDF]
  • A fundamental approach to estimating economies of scale and scope of financial products: The case of mutual funds – [PDF]
  • Economies of scale and scope in European banking – [PDF]
  • On economies of scale in credit unions – [PDF]