unmanaged switches are like dumb switches - no VLAN or other advanced layer 2 (or layer3) options. managed have a web interface or at least CLI where you can configure ports to do advanced layer 2
why switch layer 3 is more cost effective than a router?
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L3 switch routes, usually iwth a much smaller routing table → can only support a single set of VLANs
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some switches are supporting a limited set of MPLS features (mostly in the data center space)
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a router can support more routes → most handle > 1mil IPv4 routes for current routers.