Economies of scale have been historically important in the automobile and steel industries. However, modern production methods have greatly reduced the importance of economies of scale in both. How do you predict this will affect the optimal organizational structure of companies in these industries? What effect might this have on the competitive position if firms that were leaders in emphasizing economies of scale in the past?

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Economies of scale refer to the cost advantage that industries obtain due to size output or scale of operation with cost per unit of output generally ... View the full answer