Re: Threat of Chinese Overcapacity Looms Over Memory Chips

Another approach to demonstrate the meaninglessness of concepts like
"Chinese overcapacity" is the rule of profit maximization.
"The profit maximization rule formula is. MC = MR. Marginal Cost is the
increase in cost by producing one more unit of the good. Marginal
Revenue is the change in total revenue as a result of changing the rate
of sales by one unit. Marginal Revenue is also the slope of Total
Revenue. Profit = Total Revenue - Total Costs."
https://www.intelligenteconomist.com/profit-maximization-rule/
Implication: Any firm, would increase production until MC=MR. And
conversely, decrease production until MC=MR.
Again, the production capacity is not a fixed value. Firm, or firms
collectively, would adjust their capacity and production upward or down
to maximize profit.