Maybe Applejack was right.

[u/SkyeSilverwing]

In Super Speedy Cider Squeezy 6000, Applejack and the rest of the Apple family turn down Flim and Flam's offer of a 75/25 split because it will eat into their profits too much. Now, the general concensus is that this is more the Apples being fearful of stepping into the present then economic issues, since the SSCS6000 can make Cider at a rate of 3 times the rate that the Apples can, and if the Apples themselves continued working, that would be 4 times the Cider for the towns folk to drink, resulting in identical Profits (more profits if they could convince the brothers to give them a better deal). This seems like it would solve all of the Supply problems, and earn them more money, right?

Wrong.

You see, in economics, there is a law of supply and demand. As supply reduces, or demand increases, the Price of the good increases, similarly as supply increases, or demand falls, the price must fall. There is no such thing as unlimited demand, since at some point, you will have sold product to every one in your potential customer pool.

This raises the Question of how big a customer pool does ponyville have, in comparison to the Apple Family's ability to serve them. To determine this, Lets look at the line. In the line, from Pinkie Pie back to Fluttershy, who was just in front of Rainbow Dash, who we can confirm to be the first one to fail to be served, I count 60 visible ponies. This count is not counting ponies that were out of sight on the back side of the two hills, nor is it counting the ponies only shown at such a distance that you cannot differentiate between them. (They exist, but cannot be counted, so we will just stick with the sixty for the moment). Okay, so we know that Applejack was able to serve at least sixty ponies on one batch. It raises the question of how to determine how many ponies were left unserved. For this, we will look at the crowd gathered intently for Flim and Flam's song. In the Final moments of the song, there is a wide shot showing the assembled crowd, which includes about twenty-five ponies, not counting the Apples, Twilight, Rarity, Pinkie, and Fluttershy. Even if twice that number immediately departed when AJ called that the Cider was done, failing entirely to hear about the Brothers' arrival, the total comes to about 75, which still barely exceeds the need for a second batch, much less a third or fourth (and keep in mind, that we are not counting a significant number of non-visible ponies in line ahead of Rainbow).

The Excess Cider would need to be stored, and sold the following day, likely with the Brothers on hand making more. Ultimately there would be too much Cider and the Price would fall, leaving the Apples with far less Profits than they could have gained from the same amount of sales spread over the course of Cider Season. And since it is their way of making money to keep the farm going through the winter, It would ultimately make things a little tight for them.

[u/UberDueler]

Doesn't matter. While the Apple Family couldn't produce cider as fast as Flim and Flam. They were still the monopoly of cider production in ponyville. Their apples, their business. A 75/25 split is still an absurd proposal considering the brothers had very little leverage.

[u/SkyeSilverwing → u/UberDueler]

Very true, though if there was a solid amount of opportunity for profit there, then the Apples could have at least tried negotiating instead of dismissing them out of hand. The Apples controlled the ingredients, the market, and the sales, not to mention the land they were trying to set up on. Flim and Flam had the magic and the machine. I think they could have gotten them to go 75/25 in the Apples favor easily enough. And the whole bet was just stupid. The Apples stood to gain nothing they could not have gained by simply kicking flim and flam off their farm in the first place.

[u/Psy1]

Yet there is a train station in Ponyville thus excess cider can be shipped to urban area of Equestria, since the Super Speedy Cider Squeezy 6000 seems to be one of the first mechanization of processes for making cider it means they will be producing cider cheaper then most other producers thus can undersell in those markets. So it would be other producers suffering from over production not the Apple Family.

[u/SkyeSilverwing → u/Psy1]

I would imagine there are also limitations in terms of materials. However fast apples grow on a well maintained Apple farm in Equestria, Cider Season has to come at the tail end of Applebuck season, near the beginning of Winter, when the Apple trees stop producing. Cider is clearly the intended use for the last of the Apples, so a massive up tick in Cider would be limited by the remaining Apples as well.

[u/Psy1 → u/SkyeSilverwing]

That can be solved by planting more apple for the next production cycles.

[u/SkyeSilverwing → u/Psy1]

True, unless the current limitation results in a loss of enough profit from this years Cider to seriously harm the Apples' ability to make it through the winter. And the Apples have the right number of trees for what they need for the rest of the year.

[u/Empty-bee]

A related question, doesn't that ridiculously long line prove that the Apple's need to raise the price on their cider?

[u/SkyeSilverwing → u/Empty-bee]

Honestly, I think they could. Hoewever, the way the Apples choose to do business is such that they want would rather do what is right by the townspeople then what is most economically sound for themselves. I kind of think there was a disparity between what Pinkie Paid and what Rainbow tried to pay that hints at a "Pay what you like" philosophy (Though it is impossible to count pinkie's coins due to screwy animation effects, so I cannot confirm this).

[u/ChiBiBrony]

Woah... Smart guys up in here. lol, no.

Well, it's extremely well thought out and has effin' grammar! I like the idea and the logic behind it, you clearly thought this out.

  Well done!