Learn more: http://www.policonomics.com/economies-of-scale/ This video explains how economies of scale affect production. We start by explaining how the average cost curve defines when economies of scale appear, and then analyse the difference between economies and diseconomies of scale. Related videos: -Returns to scale: https://www.youtube.com/watch?v=A5E1sOYh6No -Fixed and variable costs: https://www.youtube.com/watch?v=vMYG3QFovFA Related articles: -Natural monopolies: http://www.policonomics.com/natural-monopoly/ -Returns to scale: http://www.policonomics.com/returns-to-scale/ Thank you for watching! http://www.policonomics.com/ Learn, and enjoy!