Technical Economies Of Scale - GCSE Business Definition

Technical economies of scale are the cost advantages achieved through an increase in output. This is caused by a more efficient use of technology and specialised equipment. As a business grows, it can invest in advanced machinery or automated systems that may not be affordable or practical for smaller businesses. This investment allows the firm to produce products at a lower average cost because of increased efficiency and productivity.

For GCSE Business students, understanding technical economies of scale highlights how businesses can lower unit costs and improve competitiveness by expanding their operations and adopting technological improvements.