Editing Economies of scale (section)

===Capital and operating cost===
Overall costs of capital projects are known to be subject to economies of scale. A crude estimate is that if the capital cost for a given sized piece of equipment is known, changing the size will change the capital cost by the 0.6 power of the capacity ratio (the [[#Rule of six-tenths|point six to the power rule]]).<ref name=":0">{{Cite journal
 | last = Moore
 | first =Fredrick T. <!-- | =In microeconomics, economies of scale are the cost advantages that enterprises obtain due to size, output, or scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output. Often operational efficiency is also greater with increasing scale, leading to lower variable cost as well. Economies of scale apply to a variety of organizational and business situations and at various levels, such as a business or manufacturing unit, plant or an entire enterprise. For example, a large manufacturing facility would be expected to have a lower cost per unit of output than a smaller facility, all other factors being equal, while a company with many facilities should have a cost advantage over a competitor with fewer. Some economies-->
 | title = Economies of Scale: Some Statistical Evidence
 | date = May 1959
|journal=[[Quarterly Journal of Economics]]
|volume=73
|issue=2
|pages=232–245
|doi=10.2307/1883722
|url=http://msuweb.montclair.edu/~lebelp/MooreEcsScaleQJE1959.pdf
| jstor =1883722
 }}</ref>{{efn|In practice, capital cost estimates are prepared from specifications, budget grade vendor pricing for equipment, general arrangement drawings and materials take-offs from the drawings. This information is then used in cost formulas to arrive at a final detailed estimate.}}

In estimating capital cost, it typically requires an insignificant amount of labor, and possibly not much more in materials, to install a larger capacity electrical wire or pipe having significantly greater capacity.<ref>See various estimating guides that publish tables of tasks commonly encountered in building trades with estimates of labor hours and costs per hour for the trade, often with regional pricing.</ref>

The cost of a unit of capacity of many types of equipment, such as electric motors, centrifugal pumps, diesel and gasoline engines, decreases as size increases. Also, the efficiency increases with size.<ref>See various engineering handbooks and manufacturers' data.</ref>