last word Suppose that minimum efficient scale for producing items with a 3-D printer
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last word Suppose that minimum efficient scale for producing items with a 3-D printer is 100 times what a typical family would consume in a year. Would you expect each family to have its own 3-D printer? What sort of industry structure might arise? |
Explanation
The family would not like to have a 3-D product P as the use of the 3-D product P by a family will be very less as compared to the firms or the businesses.
This can be made more clear through the use of an example where a family is expected to print 50 objects annually using a 3-D printer. Given that the minimum efficient scale of a 3-D product P is to print 100 times the annual print by a family, there needs to be around 5,000 objects printed per year for achieving the minimum scale. T
he firms therefore would find a business opportunity and after setting up their business models, they would achieve the minimum efficient scale of 5,000 objects per year and therefore will have a cost advantage over the families who print per year for themselves.
The 3-D product P will be proved more efficient to the businesses as compared to the customers or families that print using a 3-D product P because the families would not be able to achieve the minimum efficient scale and therefore would have relatively higher costs. As such, they would like to get their objects printed by the firms.
This would led to the existence of several small firms in the industry printing objects for the local families.
Verified Answer
No, families are not likely to own 3-D product P
The industry would consist of a large number of small printing firms that uses 3-D product P for printing objects.
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