Supply -
Side Economies of Scale and Scope; 2.
Demand -
side Economies of Scale (Network Effects); 3.
Supply -
side economies of scale exist when there are reductions in the average cost per unit associated with increasing the scale of production for a product or service.
For example, despite having significant supply -
side economies of scale, General Motors never was able to obtain 100 % market share.
Both Amazon AWS and Microsoft Azure have supply -
side economies of scale that benefit their business.
Not exact matches
(Interestingly, there are
economies of scale on the small - solar
side.
Costco has supply
side scale economies of scale that help create its moat, but it is not even the only warehouse club in terms
of market share.
Domestic business makes sense, most
of the time, but sometimes businesses would rather
side with
economy of scale whenever importing their supply
of products as opposed to sourcing domestically.
Though, as Love explains, Amazon has the advantage
of not having to break even or turn a profit because they have
economies of scale on their
side.
Now the first
of a kind plant is always going to be a bit expensive, and 275 MW is a bit on the small
side to get
economies of scale, but a factor
of 3.5 is pretty high.
(Interestingly, there are
economies of scale on the small - solar
side.