• pearsaltchocolatebar
    link
    fedilink
    arrow-up
    10
    arrow-down
    1
    ·
    edit-2
    10 months ago

    Just one caveat - if you double production, you’re not doubling your income or profit.

    • Darkard@lemmy.world
      link
      fedilink
      English
      arrow-up
      18
      arrow-down
      1
      ·
      10 months ago

      That’s why the realistic outcome to this scenario is that she fires half her workforce there by maintaining the same level of production while also slashing labour costs.

    • antidote101@lemmy.world
      link
      fedilink
      arrow-up
      5
      ·
      10 months ago

      I think the comic is supposed to be a lampooning of Ayn Rand’s philosophy… Not an accurate model of business considerations within a production based industry.

    • Ummdustry@sh.itjust.works
      link
      fedilink
      arrow-up
      4
      arrow-down
      1
      ·
      10 months ago

      I mean you might be, depending upon what % of the total market you operate and what the exact inputs of the new method are.

      • pearsaltchocolatebar
        link
        fedilink
        arrow-up
        1
        ·
        10 months ago

        No, you never will without increasing prices to cover the additional overhead of increased production.

        Remember, only the machine is doubling efficiency, but operations has to increase to handle the new output and resources required.

        • Ummdustry@sh.itjust.works
          link
          fedilink
          arrow-up
          2
          ·
          10 months ago

          But some operational costs (I.e. Ground Rent, Marketing, Legal Fees, IP Costs etc…) do not scale with increased output.

            • Ummdustry@sh.itjust.works
              link
              fedilink
              arrow-up
              1
              ·
              10 months ago

              Again this is a case of “it depends”. If you are not a market driver then yes it does. (‘mom & pop motor vehicles’ isn’t going to make a dent in the global car market. )

        • trolololol@lemmy.world
          link
          fedilink
          arrow-up
          1
          ·
          10 months ago

          Not if most of you cost is labor, you’ll be approaching marginal increase in costs but still certainly of double income.

          • pearsaltchocolatebar
            link
            fedilink
            arrow-up
            1
            ·
            10 months ago

            The labor costs aren’t going away, just shifting. You have to increase employment in other areas to handle a 100% increase in product output.

            Besides the fact that labor costs are rarely a large enough portion of a manufacturer’s budget to make that big of a difference.