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Economies of scale
ECONOMIES OF SCALE

Definition: Economies of scale are the financial advantages that a company gains when it produces large quantities of products.
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* Gains will be in any, a few, some, or all of the forms below:


1. The liquidity of the company will be enhanced.
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See perfect RECAPITALIZATION.



2. Its market share will be higher, in comparison with a competitor's.
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See perfect MANAGEMENT BUYOUT.



3. A capacity to be influential in the industry, in a price war, etc.
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See perfect RUNNING COSTS (1).



4. Its labour or work force would be better engaged and/or satisfied.
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See perfect EMPLOYEE ENGAGEMENT.



5. The owner(s), employees, management, etc. will be better off, by way of higher dividends or wages, larger golden handcuffs, etc.
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See perfect LABOUR RELATIONS.

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