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No. It means that at the 5 pizza scale, if you're selling your pizzas at $5 (assuming $3.00 ingredient and labor costs other than dough), rather than a $.50 los
by mangeletti 10y ago
No. It means that at the 5 pizza scale, if you're selling your pizzas at $5 (assuming $3.00 ingredient and labor costs other than dough), rather than a $.50 loss per pizza ($5.00 - $3.00 - $2.50), you're now making a $1.34 profit per pizza ($5.00 - $3.00 - $.66).
- thfuran 10y agoBut the stated premise is that they're selling at a loss. Economies of scale don't permit you to generate profit while selling at a loss.
- mangeletti 10y agoThe point of an economy of scale is that, once reached, it can lower costs (think quantity discounts), which means what was a loss at lower quantities can become a profitable business.