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To: Don Lloyd who wrote (322)	11/30/2003 2:00:27 AM
From: Wildstar	Read Replies (3) \| Respond to of 445

Don, Yes. We need to keep in mind here that we are talking about all costs being either sunk or non-interfering with the achievement of the PEAK price. The 'various reasons' of which I am currently aware would include a marginal cost of replacement above the PEAK price and a limitation of available supply that would not satisfy the amount demanded at the PEAK price. Can you further explain what you mean by 'cost of replacement'? [[[[The price of the SFOP is directly imputed by the monopoly supplier of the consumer good, since no other buyers of that SFOP exist (although numerous sellers may exist). It will be determined from bargaining between the single buyer of that SFOP and the marginal seller of SFOP.]]]] There is a question as to whether it is the seller of the consumer product or the supplier of the SFOP that is effectively the monopolist and who reaps the profits. Different cases may be different. How is the supplier of the SFOP a monopolist? There can be many suppliers of the SFOP. [[[[Since the price of the NFOP is set by other buyers, the only real bargaining power the monopoly consumer good supplier has is in the buying of the SFOP.]]]] I think that the emphasis is backwards here. There is no need to bargain for a NFOP because it generally already has a lower price than it needs to have. The alternate uses of the NFOP will usually provide it at a bargain price. What is the backwardness? That the relatively low price of the NFOP already exists, and does not need to be bargained for by the monopoly supplier? Wildstar