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Politics : Ask Michael Burke
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To: Don Lloyd who wrote (70944)11/23/1999 5:15:00 PM
From: cfimx  Read Replies (1) of 132070
 
>>Example: I can replace a worn out $1000 machine with a brand new $2000 machine that makes my workers more productive. If all competitors continue to earn the exact ROC, profits will be higher for all and (all else being equal) they should be sustainable...)<<

what you are describing though is an orderly, rational market. competitive, especially commodity businesses, are seldom orderly or rational.

What if one your competitors drops his price to gain share and ACCEPTS a lower ROC? And what if more competitors follow and ALSO accept a lower ROC? That doesn't sound like a formula for sustainable HIGHER PROFITS FOR ALL. That's exactly the problem in any commodity business like memory. MU is at the mercy of what taiwan, korea, and japan do with prices. The world is not like a textbook.
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