Quote:
Originally Posted by mARC
As far as selling 5units for the same price when your chosen market is prepared to buy in at the increased price are you crazy?
Your per unit cost is going to increase if you go along that route 'repairs and maintenance, increased cost in staffing to cope with production increases, capital asset replacement, possibly spoilage as well as you could safely say that product quality would decrease, increased warehousing costs as you may need to upgrade your facilities the list goes on.
Flooding the market also decreases the exclusivity of your product which is a key variable in the luxury car market.
The tooling is already there, you've paid for it, why increase capital expenditure, why exhaust it?
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In my example, I'd rather have the $1000 profit than a heap of economic tripe and only have $500 profit.
Name of the game is profit. If you can have a good volume on a good profit and generate more overall profit, why not do it? I don't see any reason a business would want to have a high profit, sell less, make less overall profit all just to stay 'exclusive'.
McDonald's may as well just sell one burger for $100,000 per day using your logic.