What are some of the sources of cost savings for recent business start-ups in the U.S. economy such as Intel, Starbucks, Microsoft, Instagram, Amazon, and Cisco Systems?

These firms reduce their costs by moving from higher to lower points on their short-run cost curves and by downward and to-the-right shifts of their short-run cost curves via economies of scale. A major source of lower average total costs for rapidly growing firms is the ability to spread huge product development and advertising costs over a larger number of units of output. These firms also achieve economies of scale from learning by doing and through increased specialization of labor, management, and equipment. After starting up, such firms experience declining average total costs over the years or decades that it takes them to eventually reach their minimum efficient scale (MES).