Business A-Level
Economies of Scale
What Economies of Scale means in Business A-Level, as defined for Pearson Edexcel.
Definitions of Economies of Scale
Exam boards and our study guides word this term in slightly different ways. Learn the version your board uses.
The cost advantages that a business obtains due to expansion, leading to a decrease in the average cost per unit.
The reduction in average unit costs that occurs as a business increases its scale of production.
Topics that use Economies of Scale
- Assessing competitiveness (Pearson Edexcel A-Level)
- Theme 3: Business decisions and strategy (Pearson Edexcel A-Level)
Related terms
- Benchmarking
- Competitive Advantage
- Inorganic (External) Growth
- Market Penetration
- Market Share
- Organic (Internal) Growth
- Product Differentiation
- Diseconomies of Scale
Using Economies of Scale in the exam
Definition questions usually carry one or two marks, and examiners look for the precise wording. Write the definition from memory, check it against the version above, and then use the term in a longer answer on the same topic so it sticks.
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