Economics & Finance
Cost-Demand Mismatch & Capacity Paradox
When external shocks (fuel prices, exchange rates, demand collapse) simultaneously compress margins and inflate costs, companies face a counterintuitive dilemma: cutting capacity may accelerate deterioration by reducing marginal returns, yet running at full capacity burns cash. The optimal solution often lies not in compromise, but in reallocating resources toward high-leverage routes.
Read the daily articles behind this idea on the Chinese edition.