Re:Facebook Profit Jumps 71% Year-over-Year
by thaumasiotes on Thursday July 27, 2017 @01:51AM
(#14862963)
> I don't think your comparison to widgets holds up. Would a company invest capital in more production capacity to sell more widgets at zero margin (all else being equal)? No
Who said anything about zero margin? You're claiming that if I can sell one widget at a high price (high margin!), I should be unwilling to sell any at a lower price (but still high margin!) than the first one would sell for, because my rate of return on investment would go down (assuming the cost of producing a widget is dominated by variable costs). This does not describe the behavior of anything.
Who said anything about zero margin? You're claiming that if I can sell one widget at a high price (high margin!), I should be unwilling to sell any at a lower price (but still high margin!) than the first one would sell for, because my rate of return on investment would go down (assuming the cost of producing a widget is dominated by variable costs). This does not describe the behavior of anything.