Re: market competition fails again

["Devine, James" <jdevine@xxxxxxx>]

Title: RE: [PEN-L] market competition fails again

Is there empirical evidence that the problem of low marginal costs and high fixed costs is so important to the economy that it changes the over-all dynamics of the economy?

BTW, I hope no-one is trying to reduce _all_ of the problems of the capitalist market to this single problem. There are lots of other reasons to expect competitive markets to fail, e.g., externalities and adverse selection.

------------------------
Jim Devine jdevine@xxxxxxx &  http://bellarmine.lmu.edu/~jdevine

> -----Original Message-----
> From: Michael Perelman [mailto:michael@xxxxxxxxxxxxxxxxx]
> Sent: Monday, June 23, 2003 9:07 AM
> To: PEN-L@xxxxxxxxxxxxxxxx
> Subject: Re: [PEN-L] market competition fails again
>
>
> There is another tweak to the idea.  In some cases, modern information
> technology has reduced the marginal cost of some superficial forms of
> variety.  So, for example, it magazines can print something
> personalized
> for you in their advertisements or automobile companies can
> vary the color
> scheme on new cars.
>
> On Mon, Jun 23, 2003 at 07:25:51AM -0400, Doug Henwood wrote:
> > Michael Perelman wrote:
> >
> > >exactly.
> > >
> > >On Sun, Jun 22, 2003 at 06:03:27PM -0700, Sabri Oncu wrote:
> > >>
> > >>  Well, in the information age all we have is low marginal costs
> > >  > and high fixed costs, is it not?
> >
> > How many commodities does that apply to? There's software,
> > entertainment products, and...?
> >
> > Doug
>
> --
> Michael Perelman
> Economics Department
> California State University
> Chico, CA 95929
>
> Tel. 530-898-5321
> E-Mail michael@xxxxxxxxxxxxxxxxx
>