NAFTA Years Later

[HershOstropoler]

Originally posted by Adam Smith
One example was the English vs. French legal system. The English system provided greater protection of property rights from expropiration by the state, thereby leading to greater capital investment. Part of this stemmed from the Magna Carta roots versus the centralization of French monarchy.

Expropriation and centralization? Odd.
AFAIR the history, a much bigger problem was the permanent default on french public debt.

I don't get the tax collection example. The more interesting thing in my view is bureaucracy vs conductors. Can you elaborate on the point?

[Odin]

Up here in rural Minnestota I get annoyed every time I see a farmer with a fancy new pickup and is getting subsidies. They are also annoying when they say "I'm not gonna give up my farm, its been in my family for generations." like it was a sin no get a job in city. If they can't make a profit on thier farm then there are too many farmers, what a bunch of bast@rds. If the government needs to buy extra grain from farmers to keep the prices high there is something wrong. We are unfortunately stuck with it because voting against subsidies would be political suicide for a senator from a rural area. (the house isn't a problem because the rural states have few representatives, but in the senate well, you know. )

DOWN WITH THE SENATE! BREAK THE POWER OF THE RURAL HICKS!!!

[Imran Siddiqui]

Even without the Senate, Odin, that wouldn't do anything (bills take both houses to pass). Represenatives would continue to vote for subsidies, and those in urban areas would strike deals with those in rural areas to continue farming subsidies. Furthermore, you'd get farmer parties (like in the 1890s) clamoring for change.

Also you have some pretty big Democrats that are pro-farm subsidies like Tom Harkin and (in the past) Richard Gephart. I'm not sure how the Republicans feel about the issue, but they probably are for some of them as well.

Basically, farm subsidies ain't going away, even without the Senate... remember the House has to pass those bills for the subsidies.

[Imran Siddiqui]

I don't think they can just change their prices like that. They can lower their prices or keep them constant. But increasing them damages their consumer relations.

They did in the days before Sherman. Witness preditory pricing done by US Steel and Standard Oil. When the competitors were gone, they'd jack up their prices again.

[Kidlicious]

Originally posted by Imran Siddiqui

I don't think they can just change their prices like that. They can lower their prices or keep them constant. But increasing them damages their consumer relations.

They did in the days before Sherman. Witness preditory pricing done by US Steel and Standard Oil. When the competitors were gone, they'd jack up their prices again.

They could do it, but usually don't because there are negative consequences. When another firm moves into the industry they would have the advantage of the monopoly firms poor public image.

[Kidlicious]

Re: Re: Re: Re: Re: Foooooore!

Originally posted by Master Zen
Thus, monopolies produce at a price low enough that no potential competitor can compete with, yet much higher than what they could if they were playing at MR = MC.

I have to come back to this. You are saying that the firm would produce at a quantity where MR>MC. That means that they could get more profit and revenue by producing more. Why don't they?

[Master Zen]

Plus, US Steel and Standard Oil, one century ago, didn't have to worry about public relations as much as firms do today...

[monkspider]

NAFTA is fine, it may seem bad now, but it is just an inevitable step toward eventual worldwide socialism.

[Master Zen]

Re: Re: Re: Re: Re: Re: Foooooore!

Originally posted by Kidicious


I have to come back to this. You are saying that the firm would produce at a quantity where MR>MC. That means that they could get more profit and revenue by producing more. Why don't they?

Because they'd be jacking the price. The extra revenue generated by a higher price would compensate for any revenue lost by the lower production level.

[Master Zen]

BTW, we finally have Mountain Dew in Mexico, I'm drinking some as I speak.

So, forget all the nasty things I've said about NAFTA before ok??

[Ted Striker]

Great, now with all that soda Mexicans are going to get fat like the Eurocoms.

[Kidlicious]

Re: Re: Re: Re: Re: Re: Re: Foooooore!

Originally posted by Master Zen


Because they'd be jacking the price. The extra revenue generated by a higher price would compensate for any revenue lost by the lower production level.

The higher price doesn't generate more revenue. Revenue is increased by increasing production. It increases until MR=0. Then it is maximized.

[Master Zen]

Re: Re: Re: Re: Re: Re: Re: Re: Foooooore!

Originally posted by Kidicious


The higher price doesn't generate more revenue. Revenue is increased by increasing production. It increases until MR=0. Then it is maximized.

You're looking at it from the supply side only... swing to the other axis and you generate more/less revenue by modifying the price and keeping production constant, even in a monopoly.

[Master Zen]

Originally posted by Ted Striker
Great, now with all that soda Mexicans are going to get fat like the Eurocoms.

We're already fat, and it's not thanks to the Mountain Dew...

Did you know Mexico is the world's largest per capita consumer of soda? Not good for the diet...

But they'll never make ME fat!

[Kidlicious]

Re: Re: Re: Re: Re: Re: Re: Re: Re: Foooooore!

Originally posted by Master Zen
You're looking at it from the supply side only... swing to the other axis and you generate more/less revenue by modifying the price and keeping production constant, even in a monopoly.

But what does that have to do with the firms decision?