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Author Topic:   Smalll Businesses
Taq
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Posts: 10085
Joined: 03-06-2009
Member Rating: 5.6


Message 6 of 69 (724005)
04-11-2014 1:30 PM
Reply to: Message 1 by Jon
04-10-2014 10:18 PM


As far as I can tell, small businesses are inefficient. They also employ far fewer people.
I was under the impression that small businesses were ineffecient because they employed too many people, as an aggregate.
For example, if we broke up a Best Buy shop into smaller shops that produced the same amount of aggregate sales, wouldn't we see more employees with the bunch of smaller shops instead of just one big Best Buy?
If we took Amazon's sales and put those into big box retail stores, we would see another big increase in the number of needed employees, from what I have been told.

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 Message 1 by Jon, posted 04-10-2014 10:18 PM Jon has replied

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 Message 7 by Jon, posted 04-11-2014 2:10 PM Taq has replied

  
Taq
Member
Posts: 10085
Joined: 03-06-2009
Member Rating: 5.6


Message 9 of 69 (724028)
04-11-2014 3:14 PM
Reply to: Message 7 by Jon
04-11-2014 2:10 PM


Suppose a volume of sales equal to 20 units (or its increase) is required to justify the hiring of each additional employee and a local economy has a demand of 200 units.
Does this number scale depending on the number of employees?
Just as a comparison, as a high school/college student I worked at a big meat packing plant, and I was also close with the family who owned the local butcher shop. From my own limited exposure, the amount of meat processed per person was much, much higher at the meat packing plant than at the local butcher shop. Perhaps this is an isolated case that doesn't scale to the rest of the economy, but this is a view I thought was common amongst economists. I could be wrong though.

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 Message 7 by Jon, posted 04-11-2014 2:10 PM Jon has replied

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