Comment by mlyle

> Constant marginal costs are what you get if you don't even bother to solve coordination problems

You still have coordination problems on the supply and distribution side.

> Average costs fall strictly monotonically for manufacturing

This is an extraordinary claim that is easy to refute with simple thought experiments. e.g. You think that if I want 103% of the units that a set of equipment from ASML can deliver, that average costs will be lower than producing 100%? Or do you mean "strictly monotonically" in some other sense?

Being able to vary your capital in the long run doesn't mean that you can have 10.3 sets of photolithography apparatus.

> and just copy-and-paste your whole assembly line instead

If you copy and paste and have everything truly independent, without the need for any coordination of resources, what you effectively have is multiple firms. In practice, firms still need to allocate scarce resources among lines.

> The misconception that it's a bathtub does not come from the study of manufactured goods , it comes from thought experiments about manufactured goods

This is a falsehood. Bain conducted reams of real-world research on manufacturing, plant size, firm size, and returns to scale, and this informs today's idea of LRAC. Of course, this research is 70 years old, and recent data is more ambiguous. As I've said, some believe that information technology has changed everything.