Difference Between Economies Of Scale And Economies Of Scope
The main dissimilarities or difference between economies of scale and economies of scope can be pointed out as follows:
1. Definition
Economies Of Scale: Concept of increasing the volume of output by increasing operational efficiency in order to reduce the cost of production
Economies Of Scope: Concept of reducing the cost of production by producing varieties of products with the same operation process and efficiency
2. Cost Reduction
Economies Of Scale: It reduces the production cost of a single product
Economics Of Scale: It reduces the production cost of multiple products
3. Related To
Economies Of Scale: It is related to producing a single product in bulk quantity
Economies Of Scope: It is related to producing varieties of products under the same operation.
4. Operational Efficiency
Economies Of Scale: It increases the operational efficiency
Economies Of Scope: It does not increase or decrease the operational efficiency
5. Concept
Economies Of Scale: It is an old concept of economics
Economies Of Scope: It is a modern concept of economies
6. Resource Used
Economies Of Scale: More resources are used to increase production
Economies Of Scope: Less resources are used
7. Cost Benefit
Economies Of Scale: Cost benefits because of high volume of production
Economies Of Scope: Cost benefits because of the multiple products
Economies Of Scale Vs Economies Of Scope (Comparison Chart)
I hope this post is helpful to understand the difference between economies of scale and economies of scope and to make comparison between them.
Economies Of Scale Vs Economies Of Scope (Comparison Chart)
Basis For Difference
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Economies Of Scale
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Economies Of Scope
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Introduction
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Increasing the volume of production to minimize costs
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Producing varieties of products with the same production process to minimize costs
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Cost Reduction Of
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Single products
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Multiple products
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Related To
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Production of single product in large quantity
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Producing different products under same process of operation
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Increase In Operational Efficiency
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Yes
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No
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Type Of Concept
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Traditional
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Modern
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Resources Used
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More
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Less
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Cost Benefit Because Of
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Large scale production
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Varieties of products
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I hope this post is helpful to understand the difference between economies of scale and economies of scope and to make comparison between them.
