Minimum Efficient Scale
The concept explains the important difference between a high and low MES value for market entry. It uses case study examples to illustrate MES in practice and highlights the various strengths and weaknesses of the concept. The concept also outlines the basic steps for estimating MES.
Minimum Efficient Scale Definition
Minimum efficient scale (MES) is the minimum quantity of output at which internal economies of scale are fully exploited (McEachern, 2010).
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Minimum Efficient Scale Strengths *
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Examples of Minimum Efficient Scale *
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Measures of Minimum Efficient Scale *
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Minimum Efficient Scale References (4 of up to 20) *
- Audretsch, D.B., 1995. Innovation and industry evolution. MIT Press.
- Bain, J.S., 1951. Relation of profit ratio to industry concentration: American manufacturing 1936-1940. Quarterly Journal of Economics, 65, pp.293-324.
- Bourdet, Y., 1988. International integration, market structure, and prices. Routledge.
- Crandall, R.W., 1981. The U.S. steel industry in recurrent crisis: policy options in a competitive world. Brookings Institution.
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