Unit cost

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The unit cost of a product is the cost per standard unit supplied, which may be a single sample or a container of a given number. When purchasing more than a single unit, the total cost will increase with the number of units, but it is common for the unit cost to decrease as quantity is increased (bulk purchasing), as there are discounts etc. This reduction in long run unit costs which arise from an increase in production/purchasing is due to the fixed costs being spread out over more products and is called economies of scale.