Internal economies of scale are the cost savings and efficiency gains resulting from expansions within a business. Companies can achieve these through increased production capacity, improved processes, or technology upgrades.
Economies of scale primarily apply to production processes, as increased output can lead to lower per-unit costs when fixed costs are spread over more units.
Even small businesses and ecommerce merchants can experience economies of scale, which can result in higher profits and lower prices for customers, giving a competitive edge.
As production rises, per-unit costs can decline, and economies of scale can also occur in management and marketing efforts, enhancing overall operational efficiency.
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