Yahoo-Can Herman Cain Actually Win the GOP Nomination?

[Wei Wu Wei]

Dude, Coke may only have Pepsi, Dr Pepper Snapple Group, and a couple other Major competitors, but if one or both of the companies drastically cut prices (around a $0.25 a 2 litter), then Coke will as well.

Ok, I'm going to assume everything you are saying here is 100% correct for this next paragraph:

Think about it this way, if you are running one of these other 2 major competitors, you know it may work this way.

One company can lower it's prices, which will trigger the others to do the same. If each company lowers it's prices, then there will be no change in costumer preference. Basically, if each company lowers it's prices 25 cents for a 2 liter, then the same proportion of costumers will be buying from each company as they did before the price drop. The only change in the numbers then, will be the change in price which results in a loss of profit.

Anyone who works at these companies who has as much sense as you or me will know that if they drop their prices, the other 2 companies will also drop their prices within a couple of weeks. Therefore, anyone in charge of making these decisions will look forward a month or two, and understand that if they drop their prices, they will just trigger a price drop from the other companies, and the result will be a net loss of profit.

These companies are able to think into the future too, they know that while lowering their prices may make them the best deal in town for a week, once the other prices are dropped, they just lost the only advantage they got from dropping their prices.

So, the companies know that lowering their prices will only trigger a race to the bottom and ultimately a loss of profits, so none of these companies is going to want to be the first to pull the trigger.

If another company drops their prices first, and if (this is a big if) that price drop actually hurts the profits of my company, then I will follow up with a price drop, but this is how everyone is thinking, they will all wait for everyone else to do it first.

When you have a large market full of diverse companies, it's more likely that someone will try to undercut someone else, but when you are working in a market with only 3 major players, it's very easy for this "uncommunicated, non-planned, price-fixing" to take place.

You're completely ignoring the fact that if the US went to a consumption tax, ALL OTHER TAXES on new products are gone, except for State Taxes. That alone will drive down their cost and make their products cheaper.

Except that the consumption tax will be tacked onto the very same product. I have doubts whether prices would drop at all for the reasons I listed above, but even if they did drop, adding 9% consumption tax will offset any change in price.

[fettpett]

Ok, I'm going to assume everything you are saying here is 100% correct for this next paragraph:

Think about it this way, if you are running one of these other 2 major competitors, you know it may work this way.

One company can lower it's prices, which will trigger the others to do the same. If each company lowers it's prices, then there will be no change in costumer preference. Basically, if each company lowers it's prices 25 cents for a 2 liter, then the same proportion of costumers will be buying from each company as they did before the price drop. The only change in the numbers then, will be the change in price which results in a loss of profit.

Anyone who works at these companies who has as much sense as you or me will know that if they drop their prices, the other 2 companies will also drop their prices within a couple of weeks. Therefore, anyone in charge of making these decisions will look forward a month or two, and understand that if they drop their prices, they will just trigger a price drop from the other companies, and the result will be a net loss of profit.

These companies are able to think into the future too, they know that while lowering their prices may make them the best deal in town for a week, once the other prices are dropped, they just lost the only advantage they got from dropping their prices.

So, the companies know that lowering their prices will only trigger a race to the bottom and ultimately a loss of profits, so none of these companies is going to want to be the first to pull the trigger.

If another company drops their prices first, and if (this is a big if) that price drop actually hurts the profits of my company, then I will follow up with a price drop, but this is how everyone is thinking, they will all wait for everyone else to do it first.

When you have a large market full of diverse companies, it's more likely that someone will try to undercut someone else, but when you are working in a market with only 3 major players, it's very easy for this "uncommunicated, non-planned, price-fixing" to take place.



Except that the consumption tax will be tacked onto the very same product. I have doubts whether prices would drop at all for the reasons I listed above, but even if they did drop, adding 9% consumption tax will offset any change in price.

If they are making the same profit it wont matter. Remember the only place that taxes will be collected is at the register, no where else (except state). The companies will only have to worry about any consumption tax that they have to pay for buying products, which would be lower than their current costs. Their bottom line will not be hurt, hell they could cut their price to $.50 a 2 litter and still make a killing, and probably make more money, most of the off brands do right now.

You're also falling into the trap of thinking that when a price is cut by a certain % that raising it the same % is going to take you right back to the original price. doesn't work that way.

Lets say right now a 2 litter of Coke is $1.00, they cut the price by $.25 to $.75, then add the 9% consumption tax, the price goes to $.81, which is a $.19 savings to the consumer, even factoring in State sales tax of 6% it only goes back up to $.86 a 2 litter which is still $.20 savings from the original $1.06 that that 2 litter would have cost.

Now if we go to the Fair Tax, which is 30% and where Cain wants to go, it's right about even with current price. At the current price of a $1.00 we'd get $1.36 with State included, Coke cut the price by a $.25 we'd have a price of $1.02 with both taxes, which is a $.34 savings over the $1.00 price and Coke wouldn't see a drop in sales, but because they don't have to pay the cost associated with being a business their profit margin remains the same, if not higher.

[mike128]

It's very simple.

Mitt Romney will be the Republican nominee. That's just how it is.
Everyone here (except maybe 2 or 3 libertarians) will go to the polls and vote for Romney. That's just how it is.

Not me! No way! I wouldn't vote for Mr. Flip-Flop if he was running for Dog Catcher.

[fettpett]

Not me! No way! I wouldn't vote for Mr. Flip-Flop if he was running for Dog Catcher.

who you going to vote for then?

[txradioguy]

who you going to vote for then?

No one...or Ron Paul same difference. Then he can sit hom feeling glad he didn't compromise his "principals" while the rest of us get screwed with 4 more years of Obama.

[Zathras]

Not me! No way! I wouldn't vote for Mr. Flip-Flop if he was running for Dog Catcher.

Yawn....the one trick, fake conservative pony strikes again.

You know, we need to give you this as an avatar that you can't change....

http://www.youtube.com/watch?v=8eR63yESecI

That's how I picture you posting your faux conservative rage.

[Wei Wu Wei]

No one...or Ron Paul same difference. Then he can sit hom feeling glad he didn't compromise his "principals" while the rest of us get screwed with 4 more years of Obama.

Exactly. Principles don't matter, policies don't matter, all that matters is that Team R beats Obama because Sean Hannity said so.



Go Team!

[DumbAss Tanker]

Exactly. Principles don't matter, policies don't matter, all that matters is that Team R beats Obama because Sean Hannity said so.
Go Team!

As usual, you're exploring previously-uncharted levels of 'just not getting it.'

[Starbuck]

Exactly. Principles don't matter, policies don't matter, all that matters is that Team R beats Obama because Sean Hannity said so..........

And Wee Wee wins Cop Out of the Year award! He misstates his opponent's position to one he can easily defeat and then - surprise, everyone - skewers it nicely.

Way to go, Wei!:p

[mike128]

who you going to vote for then?

Assuming Flip-Flop Romney is the Republican nominee, nobody. Txradioguy was right, except I would not vote for Ron Paul.