Sweet Spot

You're the new growth adviser at the Brantwood Business Hub, in a town full of furniture makers. Every firm asks the same question: how big should we be? Grow a firm and watch its average cost per unit fall, then rise, on a live LRAC curve. Spot the diseconomies of scale when it gets too big, see external economies of scale lower the whole curve when the town grows, and lock in each firm at its sweet spot: the most efficient size.