Re: scale economies

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

Charles Mueller likes Adams, who is the probable source:
Adams, Walter. 1986. The Structure of American Industry, seventh edition
(NY: Macmillan).
 133-136: The minimum efficient scale is about 300,000 vehicles per year.


>
> 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
>
>
>


--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx