The vast majority of economic models assume that economies of scale are a direct consequence of larger unit costs.
This is actually true, but there is a special case where economy of scale is not necessarily a direct result of larger unit costs. That special case is when economies of scale are the result of economies of scale.
Economies of scale are the ability of a product to be produced at a lower cost than its unit of measure. Many economists think that economies of scale cause economies because they are a direct result of unit costs. However, most economists think that economies of scale do not directly result from unit costs. Instead, they think that economies of scale are created by economies of scale.
Economies of scale create economies of scale because they lower unit costs. But in a pure market economy, unit cost equals price. Unit costs are just the expenses of the product. Prices are the expenses of the product. But in the case of a market economy, unit cost plus price equals the unit cost of the product. This is also known as economies of scale.
So the question now is, what are unit costs in a pure market economy? In a pure market economy, if the unit costs of a product are identical for all units sold, and identical unit costs are the same across all units, then the entire economy is a monolithic market with identical unit costs. But in other cases, the unit costs can differ across all units.
And the reason the unit costs can differ across all units can be found in the market structure. If the market structure is a market where all units sell the same product at the same price, then the unit costs of all units will be the same. But if the market structure is not a pure market, then unit costs can vary among all units.
In the case of a market that is not a pure market, the unit costs will vary because of the market structure. In this case the unit cost of a unit can be different across units owned by different people, but it will be the same across units owned by the same person.
In the example above, we are assuming that the market structure is a pure market, while in the real world there are all sorts of markets, with different unit costs, across all units owned by all people. It’s important to remember when talking about economics, that it’s the market structure, not the market itself that matters. The market does not care whether it is a pure market or a market with different unit costs across units owned by different people.
But what if, instead of units owned by different people, we were talking about different types of units? For example, the government could be owned by people from all over the world, or it could be owned by people from different regions. In that case, we wouldn’t be able to simply write down the same prices for all units.
But if we had to write down the same prices for all units, we would loose our ability to make sense of the market. For example, if we bought a car for $10,000 and then sold it for $12,000, we would be going down in price, even though the market price would still be the same because we sold it for $10,000.
