While much is understood about the general pattern of industry dynamics, a critical element underlying these dynamics, the rate and fidelity of the expansion of individual firms, has been largely overlooked. We argue that the rate at which firms can reliably increase their scale of operations is a critical factor in understanding the structure of industries. Further, we show that the bases of profitability in the industry (monopoly-like profits stemming from the restriction of output, efficiency rents based on firm-specific productivity differences, or transitory Schumpeterian profits) can also be traced to the scale adjustment process. We explore these issues in a computational model of industry dynamics.