Why wouldn’t the loom company keep all the profits, by selling a loom bundle of the same production as before at the same price?
If the cost to the fabric factory is the same under both methods, then why bother switching? So it has to be cheaper by enough that it’s worth the effort to switch, at which point the profits are being split.
Why wouldn’t the loom company keep all the profits, by selling a loom bundle of the same production as before at the same price?
If the cost to the fabric factory is the same under both methods, then why bother switching? So it has to be cheaper by enough that it’s worth the effort to switch, at which point the profits are being split.