Large-scale, capital-intensive production tends to result in fewer, larger firms that have oligopolistic control over markets, allowing them to reap higher profits rather than pass savings to consumers. These large firms can use profits to purchase competitors through mergers. Additionally, the efficient production of goods often generates non-monetary costs like pollution that are borne by the public rather than producers. Well-functioning markets require regulations governing contracts, private property, competition, and production standards, but what rules are put in place involves public policy debates. There is a difference between what people need and what is demanded in the market based on ability to pay, raising questions about whether production should serve needs or demand.

1. Production Issues