Economic of scale- percentage change in average cost of production following 1% increases in output.
There are two types of Economics of scale -
1. External economic of scale - transport goods in bulk quantity so that cost come down.
2. Internal economic on scale - Jio has high fixed cost but due to large customer base they are able to reduce their cost.
Example of economic of scale - water supply in any area. They have very high fixed cost on the beginning but due to high customers coverage that cost is reduced.
There are two types of Economics of scale -
1. External economic of scale - transport goods in bulk quantity so that cost come down.
2. Internal economic on scale - Jio has high fixed cost but due to large customer base they are able to reduce their cost.
Example of economic of scale - water supply in any area. They have very high fixed cost on the beginning but due to high customers coverage that cost is reduced.
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