Economies of Scale is a principle that is of fundamental importance to many industries.

What this principle says, essentially,

is that the more of something you produce, the less money, resources, and or time, each unit

of that thing will cost you to generate. So if you design, develop, and produce 100 Playstations, and each of those PlayStation consoles

costs you $100 to manufacture, scaling up production to 1,000 of them might cost you overall

more money in aggregate, because that's 10 times as many consoles, but the cost per console

will likely go down,

maybe to $90 a piece. So the profit you can make per console will tend to go up.

Or you can lower your prices to compete with other products on the market without taking a

financial hit. These savings are typically derived from reductions in materials cost,

bulk purchasing, the plastics, processors, hard drives, wires, and other components that you'll

need to make the consoles, from reduced shipping costs per unit, from costs that you pay once

and then apply as many times as you like. Designing the console,

for instance, is an upfront cost that you can pay once and then apply an infinite number of

times without increasing that upfront cost. And from other shared expenses that don't dramatically

increase as the scope of your capacity increases, like the costs associated

with your production machinery, managerial know-how, and the systems you have in place

for getting the product from initial blueprint to someone's home.

You might have some maintenance costs to keep using these elements, but you probably

won't have to keep building new console-making

machines after you've built the ones you need. There are typically also market-based

benefits related to scale, including discounts from shippers, better prices from printers

...