In its monthly newsletter (January/February 2012) City of Phoenix proudly claim that the city is one of the best rune cities in the US.  They base this on the fact that number of city employees per 1,000 residents  is at its smallest it has been in nearly 40 years  (current it is 10.4 employees per 1,000 residents).  Hmmm….is this a good measurement of how efficient our city government is running?

Let’s talk about “ECONOMICS OF SCALE”

From Wikipedia:

Economies of scale, in microeconomics, refers to the cost advantages that an enterprise obtains due to expansion. There are factors that cause a producer’s average cost per unit to fall as the scale of output is increased. "Economies of scale" is a long run concept and refers to reductions in unit cost as the size of a facility and the usage levels of other inputs increase

When economy of scale is applied in the private sector,   as a company grows, it will do more with less i.e.  productivity per employee will increase due to specialization. 

 As a city grows the number of city employees per 1000 residents should decrease (not increase).

Am I wrong?