Running a business is expensive! There are a lot of expenses that are linked to each activity that is carried out. While some expenses are fixed in nature – to be paid irrespective of whether sales are made or not, others are variable – that are borne by the firm increasingly, on the basis of the number of units that are sold.
Economies of scale are additional savings that a firm can realize if it carries out the same business on a larger scale than it presently does.
Here are five 5 direct advantages of economies of scale (EoS) for a business: