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Unit 1 Micro: How Hot Dogs Are Made

Geoff Riley

11th November 2012

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For many industrial products the price elasticity of supply across different levels of demand is essentially perfectly elastic - i.e. a business can manufacture as much as is needed at a given unit cost for a given level of market demand. Processed food is a good example of this and I can find no better example of the idea than this stunningly clear five minute video on how hot dogs are made!


Whether or not it will make you eat more or less of these products is open to question! Note the high capital intensity of production and resulting levels of productivity; in a typical shift more than 2.5 million hot dogs are made! A sizzling example of economies of scale!

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Geoff Riley

Geoff Riley FRSA has been teaching Economics for nearly forty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD and Revision conferences in the UK and overseas.

@tutor2uGeoff

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