By increasing the size of production, storage, and transport equipment, firms seek to take advantage of an increase in volume (outputs) proportionally larger than the increase in surface (inputs). But economies of scale are limited by the strength of the materials, the distance to supply and service points, and the risks of accidents, congestion, and loss of control, which are all the more serious when the equipment in question is large. This article studies the gains and costs induced by surface/volume effects in the main industrial sectors.
- economies of scale
- industrial risk