Principles of Microeconomics / Unit 6 MIC 0535 short lesson, about 20 seconds
Economies of Scale
Captions available
The idea
Economies of scale exist when a larger scale lowers average cost: doubling every input more than doubles output, or spreads a big fixed investment over more units.
In practice
A pipe with twice the circumference carries four times the flow for twice the steel.
Where people slip
Economies of scale are a long-run idea, all inputs rising, not the spreading of a short-run fixed cost.
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