The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Economies and Diseconomies of Scale

  • Joaquim Silvestre
Reference work entry


We consider the unit costs of producing a (single or composite) output under a given technology (no technical change). We say that there are economies (or diseconomies) of scale in some interval of output if the average cost is decreasing (or increasing) there. This definition focuses on economies and diseconomies of a technical character. It is sometimes extended to cover business activities other than production (such as marketing, financing, training: see Scherer 1980).

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Joaquim Silvestre
    • 1
  1. 1.