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To: gpowell who wrote (22732)	5/29/2000 2:32:00 PM
From: 10K a day	Respond to of 29970

gpow - What the Hell is the "BS Model" ... LOL

To: gpowell who wrote (22732)	5/29/2000 3:40:00 PM
From: ahhaha	Read Replies (1) \| Respond to of 29970

So how do B & S separate when price is the critical criteria for struggle or when other factors dominate? Coca Cola gives up profit in order to post brand which by B & S makes them competitive in a different category. The intent of KO to post brand is not only to get share, but to preserve share. There are other reasons. The price war goes on nonetheless. So there is no "shake down period". However, with declining cost, but a tendency for prices to rise, the system has a propensity for ever increasing profit margins. This is never observed within oligopoly or monopoly. The opposite is, because both of these forms induce inefficiency. We can conclude that any firm that survives to the oligopoly stage will show a tendency for increasing profits. What is observed is declining margins in all large firms or collections of large firms. If increasing profits were the case, large firms would have no need to borrow, yet they are the largest borrowers adjusted for their scale and over time, they have the most leveraged balance sheets. This is part of inefficiency inducing. If you agree that government creates laws which inadvertently prop these entities, then Schumpeter's destruction is precluded. Apparently government doesn't agree with Schumpeter or B & S, and given the observed deterioration of profit margins over time, monopoly or oligopoly is a transient state even though government tries to spare it Schumpeter destruction. Chrysler, Ford, and GM, which represent a B & S oligopoly, inevitably will fail. Chrysler already did but was bailed out by government. Ford is next. GM is trying to transform themselves into a new company. This is the only way to escape destruction regardless of what government does. Where does that fit in a B & S scheme?