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Small vs Large: Scale Sneak Peek

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About this activity

Explore how size lowers costs

Created by

Nadia Hibbert
Nadia Hibbert
Jamaica

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Small vs Large: Scale Sneak Peek
 

Small vs Large: Scale Sneak PeekOnline version

Explore how size lowers costs

by Nadia Hibbert
1

I am the effect where a bigger company can cut the cost per unit as production climbs, thanks to better buying power, specialized tasks, and spreading fixed costs. Different from me are costs that drop because the whole industry grows and the supply network improves. What am I?

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There are two types: one within a single firm and one that comes from the industry's growth.

Think about buying inputs in bulk, division of labor, and spreading fixed costs over more output.

My name describes cost benefits gained by making more units.

 
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