as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.
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explain what the terms 'economies of scale' mean.
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economies of scale refer to the cost advantages that companies and organizations can obtain due to their size. this occurs when unit costs of production decrease as the scale of production increases. this is because production costs are spread over a larger output, which allows companies to get discounts on raw materials, increase specialization, and improve operational efficiency.
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