3 ms·
Is there a single word for "it's more profitable to do this thing, rather than the other thing, or nothing"? I think that's what this counts as. I think this i
by flingo 6y ago
Is there a single word for "it's more profitable to do this thing, rather than the other thing, or nothing"? I think that's what this counts as.
I think this is in the same category of decision as retailers selling old stock at a loss, because that's better than not selling it.
A large portion of the modern economy is run by spreadsheets, and crunching the numbers on what the "most-profitable" thing to do often leads to companies doing what seems insane to the average person. P.S.: only the first 2/3rds of that was directed at your comment specifically.
- lmm 6y agoI don't think there's a single word, but there's the concept of "gross profit" like I said.
- strogonoff 6y ago“Loss-conserving?” Or you could say it contains the mounting liabilities.
- zerocrates 6y agoIn this air freight context, the relevant short concept would be the "shutdown rule" of economics: you keep operating in the short term as long as your revenue covers your variable costs. If it doesn't, it's cheaper to just not operate at all, but if you're beating the variable costs you're at least minimizing your losses even if you're not covering your fixed costs. In the long run, you can't ignore the fixed costs forever and you eventually just leave the market altogether.
- occamrazor 6y agoI think the best terms woud be “marginally profitable”, or “with positive gross unit margin”