Cost advantages that businesses obtain due to their scale of operation, where the cost per unit decreases as output increases.
Coined by economist Alfred Marshall in his 1890 'Principles of Economics.' 'Economy' comes from Greek oikonomia (household management), and 'scale' refers to the size or extent of operations. The phrase formalized observations about industrial efficiency.
This phrase captures one of capitalism's most powerful forces - the bigger you get, the cheaper each unit becomes. It explains why small businesses struggle against giants and why industries tend toward consolidation, making it both an economic principle and a prediction of market evolution.
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