2 ms·
Because of Economies of scale. There is nonlinear decrease in the cost per unit when the number of units sold increases. The total cost per unit depends on ho
by nabla9 6y ago
Because of Economies of scale.
There is nonlinear decrease in the cost per unit when the number of units sold increases. The total cost per unit depends on how many units are produced.
If you process the waste from few units, the disposal fee per unit is very expensive. If you sell thousands of units, you can plan for very large scale standardize disposal procedure that drives down price to fraction what it for small number of units.
Customers don't want to pay for startup risk. So first 100 - 500 units sold could be too expensive.
You could solve this problem by selling the company to someone big, like Berkshire Hathaway Energy. They have shoulders to take the risk and money to do the capital investments when the time comes.