3 ms·
If your production cost is $235, then you need to make $235 to finance your operation. Anything more is inefficiency that competitors in a healthy market would
by p1necone 6y ago
If your production cost is $235, then you need to make $235 to finance your operation. Anything more is inefficiency that competitors in a healthy market would eat away at.
- mywittyname 6y agoThen there must not exist any markets that meet your definition of healthy, because basically every mature market works like I described. It's the most efficient strategy for minimizing costs and maximizing profits. A fundamental principal of business is that a successful one needs to earn a profit. And that profit needs to be high enough to continue operation.
- p1necone 6y agoIndeed there are no theoretically perfect free markets. I'm just arguing that Intel is getting away with a lot more than they would if they had competition more like other businesses; as opposed to the current situation where they only have to compete against AMD, and own enough patents between the two of them that it's basically impossible for new competitors to enter the market. No business needs to earn a profit. By definition profit is surplus to operating costs (and I include a reasonable emergency fund in the category of "operating costs").