Economies of scale.
There is an episode of “Big Bang” where Penny starts her own business where she makes hair barrettes that she calls “Penny Blossoms”. Sheldon points out that her slow and clumsy manufacturing techniques means she will be making less per hour than an exploited child in China.
But then he shows her how to streamline her manufacturing process so she gets a 20 percent margin on each item. Then she employs Leonard, Raj and Howard to help make the Penny Blossoms (without getting paid) and in addition to making a bigger margin, she can make more in a shorter time. This is the result of “economies of scale”.
If you make ONE thing, bespoke suits for example, they can cost 20,000 dollars or more. In “Suits”, Harvey Specter wears $12,000 dollar bespoke suits by Ralph Lauren and Tony Ford (usually Ford with matching Ford sunglasses) while Mike Adams wears better quality off-the-rack 700 dollar suits he initially steals from his drug dealer room-mate.
An off the rack suit is made in pieces, thousands of the same pieces cut from a pattern in a sweatshop in China. The more you make, the cheaper each one is because you can amortize the cost easier. For the record the “Off the Rack” suit was invented in Boston by Simmons (who also started Simmons College) in the 1850s and the “Mark down Sale” was invented in Boston by Filene around the same time.
Big power plants do the same thing. At my house in Maine this weekend we had a freak blizzard that dropped 24 inches of snow and took down power lines all over the state. As a result, we had to fire up our generators. Five gallons of gas at 20 dollars gave 8 hours of power. Most people have 7/24 power on good days for less than 100 dollars a month – and that’s with utilities maintaining poles and wires and trucks and servicemen and so on. Economies of scale is an incredibly powerful tool.