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To: Don Lloyd who wrote (77)	12/17/2001 8:41:58 AM
From: Neocon	Read Replies (1) \| Respond to of 445

I feel as if we are talking past one another, at this point. I will consider the matter, and get back to you......

To: Don Lloyd who wrote (77)	12/17/2001 3:39:50 PM
From: TimF	Read Replies (1) \| Respond to of 445

First, extra economic resources have been consumed, with material and labor variable cost expenditures both increasing by 60% from $4,000 to $6,400. Secondly, fixed costs have doubled from $10,000 to $20,000 as two independent companies must be created and maintained. Between these increases, total costs have increased more than 82% I submit that instead of an 82% increase in total cost for the extra 60% production you might instead get a total cost increase that is lower then production as the competition caused both companies to slash costs and improve efficiency to compete. Also as odd as it sounds you can get some economies of scale even though each competitor sells less then the old monopoly did. Suppliers will have to produce more which will initially raise the price for components but in the long run might lead to economies of scale that reduce the price of components and thus the costs for the two competing companies. Would you make the same argument if costs increased 60% and production increased 82%?