Distinguish between real economies scale and pecuniary economies of scale

Distinguish between real economies scale and pecuniary economies of scale

Real economies of scale are benefits accruing to a firm operating on large scale in terms of saving on the quantity of inputs leading to falling average costs of production. Or Real economies of scale occurs when more units of a good or service can be produced on a larger scale with (on average) fewer input costs

Whereas Pecuniary economies of scale are those which accrue to large size firms from discounts available to them due to large purchases of raw materials, large scale acquisition of external finance at lower rate of interest from central banks.

Or Pecuniary Economies of Scale can be defined as a situation when lower prices are paid for the factors used in the production and distribution of the product, due to bulk-buying by the firm as its size increases.

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