Cumulated Output and Cost Behaviour

Abstract

I In a number of publications, but especially in the Boston Consulting Group's booklet Perspectives on Experience, it has been argued that a profitable corporate strategy is to maximise market share. This is because as accumulated output increases, average costs are supposed to fall substantially. This is attributed to economies of scale, technological progress, learning by doing and so forth. It is the present writer's contention that this argument is of doubtful validity. The aspect of the Boston Group's representation that has attracted considerable attention is the learning by doing aspect, but we shall begin our argument by examining the economist's view of costs.

Citation

Lofthouse, S. (1974), "Cumulated Output and Cost Behaviour", Management Decision, Vol. 12 No. 5, pp. 245-254. https://doi.org/10.1108/eb001052