production question

[Guest]

i have two factories. one is 100m2 producing 81.63 plastic per hour and the other is 300m2 producing 223.6 plastic per hour.
why the 300m2 production 223.6 < 3*81.63=244.89 ?

that means the bigger factory less profit?

[Guest]

Yes. Two 20m2 buildings produce more than one 40m2 building. This gives the smaller companies an advantage over the larger ones.

[Guest]

The loss represents the economics problem of diminishing returns. If you have a field if you put 1 farmer on it he will make 1 ton of crops a year. If you put on another farmer then he can only do so much to help the first one so his contribution is 0.9 tons. Once you get to 500 people on the same field then one more person will only add a tiny amount of productivity because there are enough people to do each job so the next person could only assist the rest.
H

[Guest]

Diseconomies of scale I would call it Business studies terminology- one of hte few things ive actually learnt over the past year

But yes the classic example is 2x20m2 power plants are better than 1x40m2 power plant. This is so smaller players with smaller buildigns also get an advantage and why being a prem member gives you 40exctra slots is a good thing XD