Economics - Economies of scale

Purchasing economies

Purchasing economies

large firms that buy lots of resources get cheaper rates

Marketing economies

Marketing costs can be spread over more units of output for a larger firm

Technical economies

larger firms have access to better technology, which reduces average costs.

Financial economies

larger firms can get access to money more cheaply.

Managerial economies

larger firms can afford specialist managers

Risk-bearing economies

larger firms are more likely to have wider product ranges and sell into a wider variety of markets to reduce risk.