The most important factor of production in haircuts is human labour. If you double the population of a country, then you double the number of haircuts demanded, but you also double the amount of labour supplied.
To get around the objection of increasing labor, let’s assume instead that everyone in the country decides to permanently get their hair cut twice as often as before. What do you expect the real price of haircuts to be in 10 years? Significantly higher, about the same, or significantly less? My prior is “about the same” until I have more data.
More generally (and naively), if I had to guess whether a given industry is increasing-, constant-, or decreasing-cost, two factors I would consider are:
1) How important to the cost of the product are inputs that are finite? How much of the market for those inputs goes toward making the product (as opposed to other uses that might substitute away from that input if the price increases)?
2) What economies of scale exist in the production of the product? To what extent will greater demand-per-person allow firms to approach the maximally efficient scale?
I have not seen these (or other relevant) factors used to advocate that animal product industries in particular should be assumed to be increasing-cost. (However I do appreciate your attempt to argue that our prior should be that all industries are increasing-cost in the absence of better evidence, which I argue against in a separate comment.)
To get around the objection of increasing labor, let’s assume instead that everyone in the country decides to permanently get their hair cut twice as often as before. What do you expect the real price of haircuts to be in 10 years? Significantly higher, about the same, or significantly less? My prior is “about the same” until I have more data.
More generally (and naively), if I had to guess whether a given industry is increasing-, constant-, or decreasing-cost, two factors I would consider are: 1) How important to the cost of the product are inputs that are finite? How much of the market for those inputs goes toward making the product (as opposed to other uses that might substitute away from that input if the price increases)? 2) What economies of scale exist in the production of the product? To what extent will greater demand-per-person allow firms to approach the maximally efficient scale?
I have not seen these (or other relevant) factors used to advocate that animal product industries in particular should be assumed to be increasing-cost. (However I do appreciate your attempt to argue that our prior should be that all industries are increasing-cost in the absence of better evidence, which I argue against in a separate comment.)