Size (of the product) matters

Abstract Products get to the market in different sizes. Focusing on a model in which firms can supply and sell their product in a small or a large size and the production technology is characterized by size economies, insights are provided on the size of the products that one finds on the market. The size chosen by firms depends both on the characteristics of supply and demand but also on the pricing regime adopted by firms (linear vs. non-linear).Size of products Non-linear pricing Supply technology