Decreasing serial cost sharing under economies of scale

Article Abstract:

A novel approach to serial cost sharing, called decreasing serial mechanism, was designed in an effort to provide an efficient means of analyzing economies of scale, where changes in returns and consumer behavior are both prevalent. The concept of decreasing serial mechanism primarily centers on the allocation of the largest surplus to the agent with the greatest demand, in order to evaluate incentive properties with a great degree of efficiency. Unlike conventional cost sharing approach, the proposed mechanism outlines a decision-making procedure in analyzing quasi-linear utility functions.

Consumer behavior

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Do rate and volume matter? Transaction cost limits to economies of scale

Article Abstract:

The utilization of economies of scale revealed that rate and volume affect the average transaction cost. The rate effect heightens average cost while the volume effect creates an opposite result. The scale also revealed that company resources have the tendency to become idle if a business entity does not take into consideration output requirements in validating decisions for selecting the most highly productive machines and assembly processes.

Corporate size

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Do rate and volume matter? Transaction cost limits to economies of scale

Article Abstract:

Economies of scale has lowered the production costs of businesses due to various factors. Several economists identified these factors as the division or specialization of labor and the use of large machines and durable dies. On the other hand, the concepts of rate and volume enunciated by Armen Alchian states that average costs are increased or decreased by rates or volumes, respectively.

Finance, Production (Economics), Cost (Economics), Costs (Economics)

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