Let's assume for a minute that:
(A1) It costs the manufacturer the same $8 000 to produce 1 long-lived car
as it costs them to produce 1 short-lived car.
(A2) Technological and style changes are insignificant. (this means I'm no
longer talking about cars in today's world, but never mind)

The point is:
Since the manufacturers' profit per unit is more or less proportional to the
cost of production (call this assumption A3),
(P1) when production becomes very cheap, the manufacturers' profits can get
smaller, even if the number of sales is increased. The Salt industry comes
to mind, although this may be a fake example.
If producing 1 long-lived car costs as much as producing 1 regular car, then
the cost of producing cars-for-their-use is effectively smaller.
By (P1), producing long-lived cars could result in smaller profits (this
would happen in the form of fewer sales).

Thus the interests of the manufacturer could be in opposition to the
interests of the consumer (this reluctance to change production would be
held up by collusion with the other manufacturers). Does this make sense?

Reply via email to