Tag Archives: cost structure

Inject Some Sanity

Vaccine shortages; This industry has very high fixed costs to develop a vaccine (labs are costly), high fixed costs to produce a batch (it takes about a year), trivial marginal costs to make an extra dose within a batch (increasing the batch size is cheap) and very limited ability to store serum. Given this cost structure, (that is shares with airlines), I bet vigorous price competition is to blame for shortages, not large government purchases.