ECONOMIES OF SCALE Definition

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ECONOMIES OF SCALE is based upon the theory that the more you produce of a good, the less that it costs for each additional unit, i.e., efficiency. Specifically, it is the reduction of the costs of production of goods due to increasing the size of the producing entity and the share of the total market for the good/product.

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OPERATING MARGIN is the ratio of operating income to sales revenue.

RETROACTIVE is to affect and modify things past, e.g. a retroactive tax increase.

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