Marginal Cost Quote by Greg Thain
““overcapacity eventually destroys profits as manufacturers are more likely to make marginal cost-based decisions to regain volume.””
About This Quote
Source Speech: Business Conference, 2020
Excess capacity leads firms to cut prices, hurting profits as they chase volume over cost efficiency.
In simple terms: Too much capacity hurts profit.
Key Takeaway
Avoid overproducing; focus on demand.
Themes
economics
production
profitability
Mood
cautious
analytical
Type
business
economic
When to use this quote
- manufacturing
- pricing decisions
- inventory control
Key Concepts
capacity management
cost strategy
Questions to Reflect On
- How can firms balance capacity with demand?
- What signals indicate overcapacity?
A Different Perspective
Profit loss can persist despite cost cuts.
