4TOBM-MDFL11-Growth and Evolution I

It refers to the power that a company has when it reaches an optimal level of production to produce more at a lower cost

• Economies of scale

• Diseconomies of scale

It refers to the factors that cause an increase in the unit cost of production when the scale of operation grows beyond a certain size.

• Diseconomies of scale

• Economies of scale

They are the costs that do not change as production changes. For example, if a company operates in a rented factory (monthly rent payments are the same regardless of the amount of production of the company)

• Fixed costs

• Variable costs

• Additional costs

These are costs that vary according to changes in production. For example, if a furniture manufacturer expands production, then it will require more raw materials (metal springs, fabric, leather, etc.)

• Fixed costs

• Variable costs

• Additional costs

They are known as average costs or unit costs or average unit costs.

• Fixed costs

• Variable costs

• Additional costs