OmNomNomNom
The article stated is the production of frozen pizza from Britain, as this is a sufficient example for the observation of the economy at a scale. To define economy on a scale, it is the advantages that an organization gains when there is an increase in “size”, pertaining to several varieties of outputs. Due to the law of increasing returns, the company should see a increase in productivity, and a decrease in the average costs of products, therefore Pizza’s would get cheaper. This is seen in the companies growth, hypothetically, when companies start small, their cost for making a product usually is at the highest peak of price because of the factors of production, soon, the same company over time began to accumulate popularity and gain financial success making it possible to hire, and lower prices of pizza’s.
However there is a downfall, due to the law of diminishing returns, certain factors that were see may hinder productivity. Currently the sheer size and amount of employers working to make 2 million Pizza’s week may be the peak of maximum production, any further and the spaces may hinder production.
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I found this post very effective in understand the idea of diminishing returns. Being able to see real world examples of variable factors of productions and their increase as productions dropped really helped.