Great Economist Article on Diseconomies of Scale

The topic of economies and diseconomies of scale is a key one in microeconomics, and it's nice to see The Economist taking an interest in this important economic concept

The article provides a nice, clear introduction to economies of scale with the classic case study of shipping containers- one which I make use of to introduce the concept during lessons. But it then goes on to discuss the massive mergers that seem to be taking place all the time among large corporations, and whether they work along the same principle as the shipping containers- or not. It seems to suggest, on the whole, that the answer is 'not'. A particularly good quote, from a McKinsey research report, is that 'close to two-thirds of managers overestimate the economies of scale a merger will deliver'. Overall, a fascinating discussion of economies of scale, and definitely worth a read for both students and teachers. Please click here for the article.