Economies of scale
![As quantity of production increases from Q to Q2, the average cost of each unit decreases from C to C1.](/Images/godic/202502/09/Economies_of_scale4550.PNG")
In microeconomics, economies of scale are the cost advantages that enterprises obtain due to size, output, or scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.