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RE: Just like in the original gold rush, it's the ones selling the picks and shovels that get rich

in #bitcoin7 years ago (edited)

I wouldn't assume that costs remain constant for them. Yes, the product remains unchanged, but it is very rare that company can enjoy a marginal cost curve that does not increase with higher levels of production.

Put simply, all the bargains on necessary supplies for making the products run out, and all the best value potential employees already got hired the first time, and all the cheap space to have facilities was already taken, etc.

Unless a company is able to enjoy very high economies of scale, increasing output increases marginal cost, lowering marginal profit.

That said, I'm sure they were making profits hand over first in the last quarter of 2017!