In the Classic Hollywood studio system, studios were vertically integrated, meaning they owned every facet of production. Because of this they were able to churn out large amounts of movies every year. They would reuse sets, actors, writers and even characters as many times as they good, getting the most bang for their buck. This was how Classic Hollywood used the economies of scale concept. They made so many movies with the same raw materials that it became incredibly cheap to make them, and therefore incredibly easy to turn a profit.
This is most evident in genre films, such as westerns or detective movies. Their sets and stars were the most readily reusable and the cookie-cutter plots made scripts easy to turn out faster. That, in addition to their popularity, made them very profitable pictures. This can even be seen today, though to a lesser extent. Studios will produce lots of cheap, monotonous romantic comedies and action movies in efforts to make lots of money. And because it works, the system is perpetuated. Those genres stagnate creatively, but continue to make millions of dollars every weekend.
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