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Home » Roofing Industry Volume and Profits Don't Always Go Hand in Hand
The gain of changing production factors will reach a point where the marginal per unit output will start to decrease.
Here’s how my economics professor explained it: If you’re thirsty, drinking an ice-cold glass of water is very satisfying. Each additional glass of water thereafter is less satisfying and 10 glasses might even cause you to vomit. Sales volume works this way. In the beginning it can be a huge profit boost but eventually that return diminishes.