Update: I made a silly math mistake. That's $9 profit per shirt. So if you make 100 shirts but only sell 50 and burn the rest, that's $450 profit. You make $4.50 per shirt manufactured.
Stated another way: you can total up the manufacturing cost of the shirts you destroyed ($50) and distributed evenly among the ones you sold (50/50=$1 each) and just add that to the cost of each shirt you sell when calculating profit. Same result.
This would been that more competition would be good for the environment because it would drive down prices and margins, and thus the incentive to overproduce. But this rule actually decreases the competitive pressure and increases margins because market exit barriers = market entry barriers
gwerbin|14 days ago
Stated another way: you can total up the manufacturing cost of the shirts you destroyed ($50) and distributed evenly among the ones you sold (50/50=$1 each) and just add that to the cost of each shirt you sell when calculating profit. Same result.
nkmnz|13 days ago
randomNumber7|14 days ago
FarmerPotato|14 days ago
gwerbin|14 days ago