Economies of Scale (Economy of Scale) mean savings in quantity production, thus reducing manufacturing costs of products due to large batch production (mass flow production). It was first introduced by Henry Ford.
How works economies of scale in practice?
Economies of scale is used by enterprises to reduce costs and expand production. To produce in bulk is advantageous both in terms of cost reduction and in terms of improved quality. However, if an organization exceeds a certain size, it starts to lose the benefits of this phenomenon and costs rise again (see Diseconomies of scale).