system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: What is economies of scale?
gpt
When you are producing a product there are fixed costs (something you pay once regardless of how many units you produce) and variable costs (costs per unit).  Since fixed costs are fixed then their cost is divided across the total number of units produced, which means the total cost (fixed+variable) for a unit decreases with the number of units.  So the more of something you make, the cheaper it is to make it (usually).

For example, doing R&D to make a widget is something you have to pay whether you want to make 1 widget or 1 million widgets.  If it costs you $100,000 to design a widget, and $5 to produce the widget, if you make 10,000 of them then your cost per widget is $15 ( (10,000 * $5 + $100,000) / 10,000), but if you make 100,000 widgets your cost per unit drops to $6.