So I was having a conversation with my son who is taking Microecon. He was, apparently, the only kid in the class who actually did the most recent assignment by making a mathematical model... Anyway we had the following discussion. In classic econ theory, the assumption is marginal cost to produce a good goes up with scale. To make the 1000th costs more than to make the 1st... This contradicts most empirical info, but it has the nice property that you can predict an equilibrium.