`krugman-theory` Related Article Results

Economies of scale refer to the phenomenon where unit costs decrease as a firm increases its production volume. This concept holds a critical position especially in long-run cost analysis. Economies of scale arise due to factors such as the spreading of fixed costs over a larger output, increased efficiency in production processes, and productivity gains from specialization. When a firm reaches a certain size, the beginning of a decline in average costs is defined as “increasing returns” and con