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Scale and geographic concentration tend to push prices lower, even if just fractionally, and relatively low costs of transport for basically anything in the wor
by roughly 5y ago
Scale and geographic concentration tend to push prices lower, even if just fractionally, and relatively low costs of transport for basically anything in the world mean there's no penalty for buying from far away, so there aren't many factors pushing back from geographic concentration. Add to that concentration in other industries - a market with fewer larger buyers means larger average individual demand than otherwise, which pushes towards larger or more concentrated suppliers.
Loosely, there's a lot of economic push towards concentration, and not a lot pushing against it. Geopolitics usually operates on a slower scale than market pressures, which means we get weird things like a vested interest in Ukrainian national security due to it being the only country bothering to manufacture neon in the world.
- ajross 5y ago> Scale and geographic concentration tend to push prices lower Neon is extracted from the atmosphere. There is no geographic concentration to exploit (well, I guess technically Antarctica is coldest and so has a volumetric advantage). If Ukraine had the bulk of the supply it's simply because someone decided to invest in a bunch of manufacturing infrastructure there.
- roughly 5y agoI didn't mean geographic concentration of the resource (although that can be a factor) - geographic concentration of firms can often have a knock-on effect on both infrastructure and other supporting resources (a dock that can support exporting neon, neon-extraction-machine repair & service companies nearby, concentrated local expertise, etc).