Editing Subadditivity (section)

===Economics===

Subadditivity is an essential property of some particular [[Cost curve|cost function]]s. It is, generally, a [[necessary and sufficient condition]] for the verification of a [[natural monopoly]]. It implies that production from only one firm is socially less expensive (in terms of average costs) than production of a fraction of the original quantity by an equal number of firms.

[[Economies of scale]] are represented by subadditive [[average cost]] functions.

Except in the case of complementary goods, the price of goods (as a function of quantity) must be subadditive. Otherwise, if the sum of the cost of two items is cheaper than the cost of the bundle of two of them together, then nobody would ever buy the bundle, effectively causing the price of the bundle to "become" the sum of the prices of the two separate items.  Thus proving that it is not a sufficient condition for a natural monopoly; since the unit of exchange may not be the actual cost of an item.  This situation is familiar to everyone in the political arena where some minority asserts that the loss of some particular freedom at some particular level of government means that many governments are better; whereas the majority assert that there is some other correct unit of cost.{{citation needed|date=October 2015}}