Question is whether there are economies of scale: does the unit cost of production of services fall with scale of production? --? Why not large hospitals?

Economies of scope: by combining certain different services in the same organisations there will be savings.

 

Apparently similar cases in health care can have different costs Economies of scale can be important in certain types of services.

• average costs
• marginal costs: additional cost of one more unit of service (slope of the total cost curve)

Where MC intersects AC, is the lowest point of AC.