What happens to companies as they expand? What is meant by economies and dis-economies of scale?

• The company develops, turns multinational, increase in sales --> more profits, more customers, more staff, locations/ outlets rise, more well-known, more brand awareness, products more accessible.

• Economies of scale is the reduction in long-run average and marginal costs (from an increase in size of an operating unit). Economics of scale can be internal to an organization (cost reduction due to technological and management factors) or external (cost reduction due to the effect of technology in an industry). 
   
  • Increase in long-term average cost of production as the scale of operations increases beyond a certain level. This anomaly may be caused by factors such as (1) over-crowding where men and machines get in each other's way, (2) greater wastage due to lack of coordination, or (3) a mismatch between the optimum outputs of different operations.