... You may ask yourself; if Sumitomo Yoshimitsu were double all of its inputs would they necessarily double all of their outputs? This is where scale of production plays a part. A basic example of economies of scale would be where a minor retail outlet currently ordering fifty cassette players per week for £500.00 at £10.00 per unit, decides to order twenty weeks worth of cassette players all at once. Being that there is an order twenty times larger, you would think that the cost would presumably be twenty times larger. However, this is not the case. Due to economies of scale the twenty weeks supply of cassette players would be less expensive, due to factors benefiting the supplier. Say for example, the cassette players would now be just £9.50 per unit, instead of the usual £10.00 per unit. This means that ordering twenty weeks supply at once, instead of twenty ...

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