Socially optimal firm sizeFrom Wikipedia, the free encyclopedia The socially optimal firm size is the size for a company in a given industry at a given time which results in the lowest production costs per unit of output. This article does not cite any sources. (August 2013) This long-run average cost diagram shows that as more is produced, so long as output does not exceed OQ2, economies of scale are obtained. Beyond OQ2, additional production will increase per-unit costs, reflecting diseconomies of scale. Consequently, the societally optimal firm size is OQ2, where long-run average cost is at its lowest level.
The socially optimal firm size is the size for a company in a given industry at a given time which results in the lowest production costs per unit of output. This article does not cite any sources. (August 2013) This long-run average cost diagram shows that as more is produced, so long as output does not exceed OQ2, economies of scale are obtained. Beyond OQ2, additional production will increase per-unit costs, reflecting diseconomies of scale. Consequently, the societally optimal firm size is OQ2, where long-run average cost is at its lowest level.