What do you mean, economies of scale . Well, as families get bigger, their per unit cost of providing for each family member generally decreases. You were not as expensive to raise as the first born. Housing costs are spread over three or four children instead of two. Meal preparation for two kids would take just as long as meal preparation for 3 or 4 kids.
Businesses also experience economies of scale.
Large businesses often have lower per unit production cost than small businesses. This is true to a point. Some businesses get so large that they start to experience diseconomies of scale. This occurs most often because the right hand of the business is out of touch with the left hand of the business and per unit costs of production begin to increase due to poor planning, duplication of purchases, low quality control, etc. We will talk about this in more detail later in the semester.