Circumstances, conditions, etc. which encourage mass production of a commodity by lowering its unit cost as greater quantities are produced.
An economic principle that says as production or sales increase, the cost of each unit decreases. For example, a company that increases the production capacity of a factory by adding a second shift can create economies of scale because many costs (such as the lease for the property) do not increase, or increase only slightly, while output doubles. Executives announcing merger agreements often tout economies of scale as one of the advantages of merging.