Economies of scale, gained by supplying more than just the domestic market, can drive down the costs of R&D, engineering and manufacturing.

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Economies of scale refer to the cost advantages that a company obtains due to increased production. By supplying to more than just the domestic market, a company can increase its production and take advantage of economies of scale to reduce the costs of R&D, engineering, and manufacturing. This is because the fixed costs associated with these activities can be spread over a larger volume of sales, thereby reducing the unit cost.

Economies of Scale, Gained by Supplying More Than Just the Domestic