When the costs of production drop, the Coasian Floor drops.

· Bits and Bobs 3/31/25
  • When the costs of production drop, the Coasian Floor drops.
    • The Coasian Floor is the lower bound of where it makes sense for any company to execute on a business opportunity.
    • That floor is not some fixed bar; it is an equilibrium based on the cost of inputs, the value to be created, etc.
    • A disruptive drop in the cost of key inputs has the potential to be a massive change in the Coasian Floor.

More on this topic

From other episodes