Economies of Scale and Scope
Concept Overview
Economies of Scale and Scope Definition
Economies of scale refers to the phenomenon where the average costs per unit of output decrease with the increase in the scale or magnitude of the output being produced by a firm. Economies of scope exist when it is cheaper to produce two products together (joint production) than to produce them separately (OECD, 2008).
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Further Reading
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Economies of Scale and Scope References (4 of up to 20) *
- Ang, J.S. and Lin, L.W. (2001) A Fundamental Approach to Estimating Economies of Scale and Scope of Financial Products: The Case of Mutual Funds. Review of Quantitative Finance and Accounting, Vol. 16(3), pp. 205-21.
- Barnes, D. (2008) Operations Management: An International Perspective. Thomson, London.
- Bitros, G.C. (2005) Scale, Scope and Entrepreneurship. In Y. Cassis and I. Pepelasis-Minoglou (Eds.), Entrepreneurship in Theory and History. Palgrave, London.
- Cummins, J.D. and Xie, X.-Y. (2008) Mergers and Acquisitions in the US Property-liability Insurance Industry: Productivity and Efficiency Effects. Journal of Banking and Finance, Vol. 32(1), pp. 30-55.
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