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Value Creation
Published in Mark W. McElroy, The Space Industry of the Future, 2023
In practice, marginalism influences how market pricing works through the concepts of marginal utility and supply. In terms of demand, marginalism says that the market price will reflect value based on the final purchase of a good. For example, if on average people buy two cars, then the market price of a car is based on the utility of that second car, which presumably may be less than the first. The concept of marginal returns also applies on the supply side from continued activation of capital for production. The means of production that are most efficient will always be activated first. As production increases, efficiency decreases and diminishing returns are seen. The marginal cost of producing something is defined according to the last and least efficient unit that is produced. In summary, marginalism defines value as anything that fetches a price in the market. The amount of value is governed by utility, scarcity, marginal demand, and marginal supply. Modern markets function largely according to marginalist principles.
Downstream Processing
Published in Maik W. Jornitz, Filtration and Purification in the Biopharmaceutical Industry, 2019
The high-end technologies of downstream processing such as chromatography are reaching their limits, both physically and economically. For example, a relatively straightforward approach to scaling up any form of chromatography is simply to increase the column diameter. The sample load is then increased proportionately, so that the linear flow rate is maintained but the overall throughput increases. Unfortunately, scaling up in this manner has a number of unpredictable effects, including zone broadening, which can reduce the overall efficiency and resolution of the separation. The largest chromatography columns in current use are some 2–3 m in diameter, which is about the maximum that can be tolerated without running into operational problems (Strube et al. 2019). We are reaching the point at which increasing the scale of each unit operation no longer leads directly to an increase in productivity, and this law of diminishing returns as the footprint of each operation increases cannot be sustained.
Historical paradigms
Published in James Harty, Tahar Kouider, Graham Paterson, Getting to Grips with BIM, 2015
James Harty, Tahar Kouider, Graham Paterson
Exploitation of technology, coupled with innovation, will occupy much of the solutions tailored and matched to how we respond to the current crisis. The scale of this suggests that each iteration of innovation can deliver a technological jolt as powerful as all previous rounds combined. Economists divide growth into two types: extensive and intensive. Extensive growth is a process of adding more. This can be labour, capital or resources, which is ultimately subjected to diminishing returns. Intensive growth seeks to discover better ways to use those finite precious resources. It looks to improve technologies with a technique called ‘growth accounting’. We are now entering this zone.
The impact of the change in institutional regulation on construction productivity: firm-level evidence in a developing economy
Published in Construction Management and Economics, 2023
Mohd Azrai Azman, Nor Nazihah Chuweni, Faridah Muhamad Halil, Ku Mohammad Asyraf Ku Azir, Boon L. Lee, Farah Nazira Juhari, Martin Skitmore
Labor, capital, and total factor productivity (TFP) drive the construction industry’s output growth. Nevertheless, achieving higher output through more labor and capital can be unsustainable. This is due to the law of diminishing returns, which states that after a certain point, any increase in labor or capital will no longer contribute to increased output (Acemoglu 2009). This results from the depreciation of both capital and labor over time. Therefore, it is more sustainable to improve output growth by relying upon an increase in TFP (Kurniawan and Managi 2018). This is because TFP is closely associated with technological progress and managerial performance. However, comparing productivity changes in different industries since the 1990s reveals that construction has been plagued by weak global productivity growth, with no other industry performing worse (Barbosa et al.2017). The causes of the industry’s productivity decline are unknown (The Economist 2017). As a result, developing good policies has been problematic.