Rapidly increasing production of a certain good in a short period of
time leads to increasing opportunity costs as less capable resources
have to be switched over (capital has to be re-tooled and workers
retrained). All of that adds costs that were not there before. So it
actually costs more to produce additional units, on average.
See Beat tomorrow’s pandemic today by Scott Gottlieb. Excerpt:
"When Covid struck, the U.S. didn’t have excess capacity to make monoclonal-antibody drugs or vaccines. Making room for antibody production required repurposing facilities that had been churning out other critical drugs whose production moved to Europe. This is an expensive, risky and time-consuming process. For vaccines, there wasn’t idle capacity to manufacture at scale. While factories were built mostly from scratch, vaccines had to be rationed for months.
There are lessons from the case of Emergent BioSolutions in the early 2000s. The country was preparing for the risk of a pandemic of H5N1 bird flu. The George W. Bush administration funded the construction of domestic facilities to make flu vaccines. But in many cases, in the years since these facilities, including Emergent, were not kept fully operational and properly staffed.
When Emergent’s plant was conscripted to make the Covid vaccine developed by Johnson & Johnson, it stumbled getting the process up to sufficient scale and maintaining proper quality control. An internal government analysis concluded that, over the years, Emergent had struggled to attract and retain the specialized personnel required to run such a facility, leaving it vulnerable."
Related posts:
Flushing out the true cause of the global toilet paper shortage amid coronavirus pandemic
Ventilators and the law of increasing opportunity cost
Hand sanitizer and the law of increasing opportunity cost
Here are some basic terms that economists use to discuss this issue:
Opportunity Cost-The value of
the best foregone alternative. There is no such thing as a free lunch.
If we want to build one more skyscraper, we may have to give up one
submarine, since there may not be enough steel to go around (steel is
scarce!).
The law of increasing opportunity cost-As
more of a particular good is produced, the opportunity cost of its
production rises.
Why is the law of increasing opportunity cost true? Different resources
are better suited to different productive activities. This is just about
the same as saying people have different abilities, like some are more
entrepreneurial and some are more bureaucratic.
Worker
|
Candles
|
Shoes
|
I
|
7
|
3
|
II
|
6
|
4
|
III
|
5
|
5
|
IV
|
4
|
6
|
V
|
3
|
7
|
Combination
|
Candles
|
Shoes
|
A
|
25
|
0
|
B
|
22
|
7
|
C
|
18
|
13
|
D
|
13
|
18
|
E
|
7
|
22
|
F
|
0
|
25
|
Change
|
Candles Given Up
|
Shoes Gained
|
Candles per Shoe
|
A to B
|
3
|
7
|
0.429
|
B to C
|
4
|
6
|
0.667
|
C to D
|
5
|
5
|
1.000
|
D to E
|
6
|
4
|
1.500
|
E to F
|
7
|
3
|
2.333
|
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