As has been noted the average fluctuation in the construction industry is around 30% on a yearly basis. Still from year to year there are large changes in regards of the demand in the construction industry.
As a perishable product- the concrete can be only delivered within an hour maximum, so the plants should be located near the local geographic markets- and that means that if the demand in that area is increasing constantly, straight proportionally to that will increase the profit too.
Source: www.camfaud.co.uk
I firmly believe that the location of the plant can be used as a strategy, because if you locate your plant in an area where there is a high demand for construction, money will flow your way for sure.
Still, not only that the profit depends from the demand of the customers, but also it depends in a large scale from the rival firms. Sometimes some firms use lowering of their prices as a strategy to attract more clients.
Hence, if your firm is experiencing marginal cost constantly, and if at the same price the demand curve of your firm is expanding, straight proportionally to that it is not recommendable that you adjust the prices of the concrete.
