ECONOMIES OF SCALE: Declining long-run average cost that occurs as a firm increases all inputs and expands its scale of production. This is graphically illustrated by a negatively-sloped long-run average cost curve and typically occurs for relatively small levels of production. Economies of scale are then overwhelmed by diseconomies of scale for relatively large production levels. Together, economies of scale and diseconomies of scale cause the long-run average cost curve to be U-shaped.

     See also | long-run average cost | long-run average cost curve | diseconomies of scale | returns to scale | increasing returns to scale | decreasing returns to scale | short-run production | law of diminishing marginal returns | fixed input | variable input |

ECONOMIES OF SCALE, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2026. [Accessed: October 9, 2026].

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Goods characterized by rival consumption and the ability to exclude nonpayers. Private goods are one of four types of goods differentiated by consumption rivalry and nonpayer excludability. The other three goods are public (nonrival consumption and nonpayers cannot be excluded), common-property (rival consumption and nonpayers cannot be excluded), and near-public (nonrival consumption and nonpayers can be excluded). Rival consumption and the ease of excluding of nonpayers means private goods can be efficiently exchanged through markets.

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