>If you can send 20T to LEO but they only have 12T of cargo... You're going to go for the cheaper launcher.
Really depends on how much cheaper the smaller launcher is.
In a market where a 70% bigger launcher costs only a few millions more, it will make sense to increase the mass of your satellite/payload so you can massively save on development and manufacturing cost.
Because if your requirements stay the same but you can double the mass, your costs go down fourfold. (Roughly speaking)
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