Economies of Scale

Abstract

The discussion in Chapters 3–5 did not take into consideration the case of economies of scale (increasing returns to scale or decreasing opportunity costs). The justification is that the main body of the book deals with cases of increasing opportunity costs, hence a more thorough analysis of economies of scale at that stage would have disturbed the reader’s concentration without influencing his ability to follow later discussion. It should, therefore, be understandable that, in order to avoid that unfortunate event, this brief chapter is devoted to an analysis of that subject.