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> If it was in equilibrium then they would both have the same margins. Something has to be different or everything is the same. You can have different margins
by conanbatt 9y ago
> If it was in equilibrium then they would both have the same margins. Something has to be different or everything is the same.
You can have different margins and different volumes, with the same rate of profits for capital invested.
- AnthonyMouse 9y ago> You can have different margins and different volumes, with the same rate of profits for capital invested. Having the same historical returns isn't the same as having the same risk-adjusted returns. Having higher margins is a risk unto itself. A low-volume high-margin store might have the same total profits as a high-volume low-margin store, but move them next to each other selling equivalent products and you know which one is going out of business.