These are advantages enjoyed exclusively by a single firm or single production unit. They fall under the following types:-

Managerial /administrative economies. These arise out of specialisation of labour which results into efficiency, increased output and reduced average cost. A large firm has the capacity to employ specialists (like accountants technicians etc) and can property organise its management to achieve efficiency.

Technical economies. Large firms can afford to employ specialised machinery to produce on large scale. As a result, more output per unit of time is produced hence lower costs of production.

Marketing economies . large firms normally buy raw materials and other supplies in bulk and therefore get discounts from sellers . They can also sell in bulk in several markets using heavy trucks for purchasing and distribution hence lower average costs of production.

Financial economies :- It is easy for large firms to secure loans ( credit) from financial institutions. They have large physical assets which they can use as security and can be trusted by lenders.

Transport economies :- Transport costs per unit of item reduce when a firm is transporting in bulk or using heavy trucks.

Research economies :- large firms have huge capital reserves and can afford to establish laboratories and research centres. Experiments are carried out for improving the quality of their products and production technology which improves efficiency in production.

Welfare economies:- social economies arise because large firms can afford housing, medical care, recreation, staff transport, staff education etc.. for their workers. This can lead to improved efficiency of workers resulting into increased output and reduced average costs.

Storage economies :- Storage costs per unit output of a firm are reduced when finished goods and raw materials are stored in large quantities ( bulk)

Risk bearing economies:- A large firm ( producing on large scale) is in better position to stand against risks in production. It can afford insurance premiums which protect them against risks.

NB: Real internal economies of scale are advantages enjoyed by a large firm in the form of reduction in physical quantity of input for the same unit of output. For instance if originally 1 unit of a commodity required 10 units of labour to produce and now it only requires 5 units of labour to produce, the same commodity, then this is a real economy of scale.

Pecuniary economies of scale on the other hand arise when a firm is paying lower prices per unit of factor inputs because of buying in bulk.