Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School ...

Economies of scale refer to the cost advantages that companies experience when they increase their production. This happens because the average cost per unit goes down as they produce more items.

Investors can evaluate economies of scale to determine if a company can increase profitability and stay competitive as it grows. This happens when a company reduces production costs by producing more ...