"Big business is better for consumers because economy of scale" has just always been a lie.
No business will pass on a cost decrease if it doesn't have to. A big business will always have more pricing power than a small business. A big business will therefore pass on fewer cost savings to consumers.
Also, making food the way Chipotle does just does not have any economy of scale. The workers making burritos don't get cheaper if you hire 100k of them.
"Economy of scale" is not some magic spell that you get when you pass 10k employees. Economy of scale is a lie that covers up that if you make huge investments, you can do enough engineering and machine work to replace humans in some parts of some processes. It is not intrinsic.
It is the norm that a business will spend a lot of money on cost reduction or process improvement and then just.... happily absorb that improved profit margin.
"Big business is better for consumers because economy of scale" has just always been a lie.
No business will pass on a cost decrease if it doesn't have to. A big business will always have more pricing power than a small business. A big business will therefore pass on fewer cost savings to consumers.
Also, making food the way Chipotle does just does not have any economy of scale. The workers making burritos don't get cheaper if you hire 100k of them.
"Economy of scale" is not some magic spell that you get when you pass 10k employees. Economy of scale is a lie that covers up that if you make huge investments, you can do enough engineering and machine work to replace humans in some parts of some processes. It is not intrinsic.
It is the norm that a business will spend a lot of money on cost reduction or process improvement and then just.... happily absorb that improved profit margin.
Why wouldn't they?