just because USA has more capacity, doesn’t mean it can produce units cheaper.
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Reduction in cost per unit resulting from increased production, realized through operational efficiencies.
THAT is what ‘economies of scale’ mean. Operational efficiencies can be view in terms of {technological} improvements in manufacturing procedures. Procedures do not necessarily require robots. Better Rivets (materials) or better training (labor) or better materials delivery systems (just in time) are all realized without robots.
These efficiencies come at a higher economic cost. They are not born out of low income economies. Just look at how many small economies can produce battleships at a lower cost than a larger economy. They don’t exist if you compare quality. If you can show me an example thats fine. The largest economies can do this mush more effectively than a smaller economy, so “economies of scale” also has the meaning that the greater investment of money will necessarily lead to a greater efficiency of effort.
“refers to the cost advantages that a business obtains due to expansion. There are factors that cause a producer’s average cost per unit to fall as the scale of output is increased.”
I look at this as the more income you got for investment, the greater the potential for economies of scale. So to me these are built in factories assumed by the larger, burgeoning economies in the game.
“…since some economies of scale may require a larger market than is possible within a particular country — for example, it would not be efficient for Liechtenstein to have its own car maker, if they would only sell to their local market.”
Another indication. Italy in the game would be less capable of this compared to USA or Germany.
Perhaps rather than a tech for every 20 IPC lead the combined axis or allies have over the other side receives a -1 cost benefit for naval. that would model “economies of scale” a bit better IMO rather than paying some dude in a white lab coat 5 IPC to “invent” a cash poor nations way of getting cheaper battleships, when another nation much larger is somehow paying a 20% markup for the same battleship but has 3 times to economy to do it.
We have to agree to disagree.
