Economies of Scale: A Critical Review of the Literature

Journal article from the International Interdisciplinary Journal of Scholarly Research, volume 1 number 1 of 2015, by Rana Salman Anwar and Salman Ali of The Islamia University of Bahawalpur. A critical review of the published literature that clarifies economies of scale as the ratio of the economy and its business support functions, the route to maximising production while minimising its cost, distinguishing marginal from average operating cost and treating internal and external economies as the two levers a business controls. Uses the organisation of the financial industry as an unusually rich data source for measuring the cost function, and argues the information matters for regulatory as well as organisational decisions.