When economies of scale exist, doubt inputs will result in more than doubling output means a larger factory can produce at a lower average cost than a smaller company
When economies of scale are present, doubling all inputs leads to an output that is greater than twice as large, indicating that a larger firm can produce at a lower average cost than a smaller business.
In sectors with high fixed costs, spreading fixed costs over more units of production increases productivity. a vehicle, In sectors with high fixed costs, spreading fixed costs over more units of production increases productivity.
Manufacturing of automobiles, aircraft, and vehicles are a few examples in the private sector. The finest example in the public sector is power production. These substantial economies of scarcity result in either oligopoly markets (such as the automotive and aviation industries) or controlled monopolies (like electricity and other public utilities) proceeding after vehicles.
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