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- Title
REPLY.
- Authors
Moore, Frederick T.
- Abstract
This article focuses on economies of scale. The author was not aware that his paper had left a "predominantly negative impression" on the uses of the power rule. That rule is a crude one and can be refined in various ways. In the last part of the author's paper he specifically suggested some ways of breaking down the plant into homogeneous process areas and studying scale effects at that level. The author is in fact bullish on what might be found in that way. The author has a suspicion that normally one underestimates the extent of economies of scale because the typical study is concerned with a plant at a certain stage in production and overlooks many of the possibilities of economies through vertical integration of stages. Second, the author suspects that the data used are often biased because the capital equipment in many industries in the U.S. are aged (e.g., in nonferrous metals) and one does not study the economies associated with newer techniques. The study of the water-pumping plant is especially interesting.
- Subjects
UNITED States; ECONOMIES of scale; BIG business; INDUSTRIAL costs; INDUSTRIAL equipment; FACTORIES
- Publication
Quarterly Journal of Economics, 1960, Vol 74, Issue 3, p497
- ISSN
0033-5533
- Publication type
Article
- DOI
10.2307/1883064