<P> Economies of scale apply to a variety of organizational and business situations and at various levels , such as a business or manufacturing unit , plant or an entire enterprise . When average costs start falling as output increases , then economies of scale are occurring . Some economies of scale , such as capital cost of manufacturing facilities and friction loss of transportation and industrial equipment , have a physical or engineering basis . </P>
<P> Economies of scale apply to a variety of organizational and business situations and at various levels , such as a business or manufacturing unit , plant or an entire enterprise . When average costs start falling as output increases , then economies of scale are occurring . Some economies of scale , such as capital cost of manufacturing facilities and friction loss of transportation and industrial equipment , have a physical or engineering basis . </P>
when does a firm experience economies of scale
when does a firm experience economies of scale
When average costs start falling as output increases
When average costs start falling as output increases