I should note (and I appreciate that he was in a hurry) that when Clark writes:
EELV- drop in number of commercial flights expected raised marginal costs because of low flight rate.
— Wiped out savings from hardware improvements.
– Expendables have high marginal costs
– Reusables have low marginal cost IF they have high flight rates.
The drop in the commercial flight rate didn’t increase EELV marginal costs, it increased average costs (which are what the price has to be based on, other than loss leaders for marketing). If you price below your average cost, you’ll lose money. Increasing rate doesn’t help, because you can’t make it up in volume.
Similarly, reusables have low marginal cost regardless of flight rate. Increasing flight rate reduces average cost per flight, allowing it to approach the marginal cost as the rate increases.