Negative margins are a result of starting_cost/n + unit_costn > unit_pricen. If unit_cost > unit_price, then increasing n hurts, but in cases where unit_cost >

Negative margins are a result of starting_cost/n + unit_costn > unit_pricen. If unit_cost > unit_price, then increasing n hurts, but in cases where unit_cost > unit_price, increasing n moves your margins to the positive, unless marginal costs increase--which is admittedly sometimes the case, but in many cases they go down.