Page 3 of 4 FirstFirst 1234 LastLast
Results 21 to 30 of 33
  1. #21  
    Our widdle friend. Wei Wu Wei's Avatar
    Join Date
    Jan 2010
    Posts
    6,414
    Quote Originally Posted by fettpett View Post
    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.
    Quote Originally Posted by Adam Smith - Wealth of Nations
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
     

  2. #22  
    Best Bounty Hunter in the Forums fettpett's Avatar
    Join Date
    Oct 2009
    Location
    Southwest Michigan (in Exile)
    Posts
    8,757
    Quote Originally Posted by Wei Wu Wei View Post
    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.
    "Should I keep back my opinions at such a time, through fear of giving offense, I should consider myself as guilty of treason towards my country, and of an act of disloyalty toward the Majesty of Heaven, which I revere above all earthly kings..." Patrick Henry
     

  3. #23  
    Beaten Last Dead Horse
    Join Date
    May 2008
    Posts
    538
    Quote Originally Posted by Wei Wu Wei View Post
    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.
     

  4. #24  
    Best Bounty Hunter in the Forums fettpett's Avatar
    Join Date
    Oct 2009
    Location
    Southwest Michigan (in Exile)
    Posts
    8,757
    Quote Originally Posted by mike128 View Post
    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?
    "Should I keep back my opinions at such a time, through fear of giving offense, I should consider myself as guilty of treason towards my country, and of an act of disloyalty toward the Majesty of Heaven, which I revere above all earthly kings..." Patrick Henry
     

  5. #25  
    Senior Member txradioguy's Avatar
    Join Date
    Apr 2005
    Location
    Bavaria
    Posts
    7,980
    Quote Originally Posted by fettpett View Post
    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.
    In Memory Of My Friend 1st Sgt. Tim Millsap A Co, 70th Eng. Bn. 3rd Bde 1st AD...K.I.A. 25 April 2005

    Liberalism Is The Philosophy Of The Stupid

    To Achieve Ordered Liberty You Must Have Moral Order As Well

    The libs/dems of today are the Quislings of former years. The cowards who would vote a fraud into office in exchange for handouts from the devil.
     

  6. #26  
    Senior Member Zathras's Avatar
    Join Date
    May 2008
    Location
    San Jose, California
    Posts
    6,349
    Quote Originally Posted by DUmbass128 View Post
    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.
    Last edited by Zathras; 10-31-2011 at 02:22 PM.
    Solve a man's problem with violence and help him for a day. Teach a man how to solve his problems with violence, help him for a lifetime - Belkar Bitterleaf
     

  7. #27  
    Our widdle friend. Wei Wu Wei's Avatar
    Join Date
    Jan 2010
    Posts
    6,414
    Quote Originally Posted by txradioguy View Post
    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!
    Quote Originally Posted by Adam Smith - Wealth of Nations
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
     

  8. #28  
    Senior Member DumbAss Tanker's Avatar
    Join Date
    Jun 2002
    Location
    Missouri
    Posts
    2,767
    Quote Originally Posted by Wei Wu Wei View Post
    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.'
     

  9. #29  
    Senior Member
    Join Date
    Mar 2010
    Posts
    3,269
    Quote Originally Posted by Wei Wu Wei View Post
    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
     

  10. #30  
    Beaten Last Dead Horse
    Join Date
    May 2008
    Posts
    538
    Quote Originally Posted by fettpett View Post
    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.
     

Bookmarks
Bookmarks
Posting Permissions
  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •