The scale of production.

Scale of production refers to the size of the production unit or the production capacity of a firm. The scale of a production unit is determined by three major factors:-

The first is the size of the market which will determine the amount of output a firm should produce for sale. The second is the complexity and degree of specialisation of the product and the process involved; and the third is the type of production technique employed. Some production processes by their nature may warrant production in small units