Re: scale economies

[Thad Williamson <thwilliamson@xxxxxxxxxxx>]

I looked at this a bit during the summer and this sounds more or less
correct. in things like steel, lates wave of technology has drastically
reduced the minimum efficient scale. and the classic lit on minimal scale
says that in most American industries the existing concentration is not
mainly a result of efficiency concerns.

can you tell us who wrote this so we can get whatever hard data they have?

Thad

At 07:29 PM 11/15/97 -0500, Doug Henwood wrote:
>Someone posted this to another list:
>
>>Scale economies--the savings (in unit costs) that come with higher
>>volumes of output--are typically exhausted rather rapidly in most
>>industries.  The common estimate in the auto industry, for example, is that
>>there are no cost savings beyond 7.5% of the U.S. car market.  At that
>>volume, unit costs are as low as they can be driven with the existing
>>technology.  There are virtually no industries in which a market share
>>greater than 10% of the U.S. market is required to exhaust all scale
>>economies--to reach the lowest (technologically) attainable cost per unit.
>
>Does anyone know how true this is?
>
>Doug
>
>
>
Thad Williamson
National Center for Economic and Security Alternatives (Washington)/
Union Theological Seminary (New York)
212-531-1935
http://www.northcarolina.com/thad