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Only if the fixed costs are not a large part of the price.
by abc_lisper 8y ago
Only if the fixed costs are not a large part of the price.
- caconym_ 8y agoIt's like the Michael Scott Paper Company all over again.
- mediaman 8y agoYou mean, only if the fixed costs are a large part of the price? Fixed costs don't scale with production because they're fixed. If variable costs are nearly all the cost of production, then scaling production doesn't fix anything.
- abc_lisper 8y agoYeah. It’s mildly sarcastic. The costs of machinery, factory, people are fixed. They are not breaking even because they are not working at full capacity