Why cost decreases when output changes

Economies of Scope:-Economies of scope  occurs when products share common inputs and diversification leads to cost savings.

ECONOMIES OF SCOPE : states that when a manufacturer produces variety of products in a bulk or increases the variety of products it will results in reducing or decreasing the unit cost to produce a product.Thus, the more different but similar goods you produce ,the lower the total cost to produce  each one.

EXAMPLE:-There was a cloth manufacturer he produces men's and women's  shirts.Adding a children's line  of shirts  would definitely increases economies of scope because now a cloth manufacturer can use the same production Equipments,tools,storage,machines,supply and distribution channels to make a new line of products.That will further reduces the cost of production on all the shirts which a manufacturer produces.

2. Reliance Trends,Big Basket,Amazon, Facebook all used liverage of economies of scope.