Structure, means that as the scale of output goes up, average costs of production decline—at least up to a point.

Access for free at openstax.org
19.3 • Intra-industry Trade between Similar Economies 463

Figure 19.5 illustrates economies of scale for a plant producing toaster ovens. The horizontal axis of the figure

shows the quantity of production by a certain firm or at a certain manufacturing plant. The vertical axis

measures the average cost of production. Production plant S produces a small level of output at 30 units and

has an average cost of production of $30 per toaster oven. Plant M produces at a medium level of output at 50

units, and has an average cost of production of $20 per toaster oven. Plant L produces 150 units of output with

an average cost of production of only $10 per toaster oven. Although plant V can produce 200 units of output, it

still has the same unit cost as Plant L.
{"source": "downloads\\business\\economics\\Microeconomics3e.pdf", "batch_upload": true, "creator": "PDFMiner", "uploaded_via": "batch_uploader", "file_name": "Microeconomics3e.pdf", "moddate": "2022-12-07T14:23:05-06:00", "file_size_mb": 26.99, "creationdate": "2022-12-07T14:15:44-06:00", "file_hash": "830b81f41611ac67a490444dbb5d6aed292224606965b06965b914443c93331a", "title": "Principles of Microeconomics 3e", "total_pages": 597, "upload_timestamp": "2026-02-07T15:24:38.309401", "source_file": "downloads\\business\\economics\\Microeconomics3e.pdf", "file_type": ".pdf", "producer": "Prince 14.2 (www.princexml.com)"}