Why unit cost can fall
Design, mobilization, tooling, management and other fixed or step-fixed costs may be spread over more output. Larger purchases can improve supplier terms or equipment utilization.
Why diseconomies appear
Coordination layers, congestion, long supply chains, scarce labour, quality control and interface complexity can increase faster than output. Capacity thresholds may require a new facility, shift or system.
Use nonlinear relationships carefully
Cost-capacity factors and learning curves can support early estimates, but only within a validated range and for sufficiently similar technology and conditions.
Separate scale from scope
A larger project often changes specifications, redundancy, location or delivery method. Normalize those differences before attributing the entire cost change to scale.