Indivisibility of the production process and “economies of scale”

Abstract

The indivisibility of production processes means that in practice, below a certain volume of output, it is impossible to carry out certain types of production or to follow certain production techniques. From the point of view which we are considering, this impossibility is extremely important. In fact, if this impossibility did not exist, the problem of the effect of population settlement on development would be posed in very different terms, and probably the increase in the population of a territory would even appear to have mainly adverse consequences on the possibilities of increasing (in the long term and in the short term) the level of living of the population of that territory. This point merits consideration for a moment.