The note describes various concepts of economies of scale, sources of economies and diseconomies of scale, and discusses various methods of measuring economies of scale on the basis of empirical data, viz. survivor technique, long run cost curves method, and engineering method. The methods involve the estimation of the relationship between the costs and the scale of production and share of particular size groups in the total output of industries. These relationships guide industries and the government in finding the economic size of manufacturing operations, thereby utilizing available resources optimally.