An engineering approach can be used to analyze the economics of production processes in many industries in terms of the impact of technical and scale changes. In addition to statistical cross section and time-series studies made by observation, the engineering approach includes all physically feasible combinations of inputs. The steam-electric power industry is used as an engineering model to demonstrate processes (e.g., steam electric generation, oil refining, metal fabrication, etc.) on the basis of different machine characteristics. Results indicate that changes in prices of fuel and capital have an impact on design efficiency but not machine capacity in these industries. (38 references) (DCK)
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Thomas G. Gowing (1974) studied this question.