> I always found this statement to be rather wishful. Individual lowering of prices makes sense if and only if your competitor is capable of saturating the market. Otherwise, demand elasticity becomes very relevant. Sure, your competitor may take the larger share of the market, but then you can compensate with higher per item profit.
You should check the distinction between Bertrand and Cournot competition. Bertrand competition is price competition where the competitor can saturate the market, as you mention. Cournot competition, on the other hand, captures your intuition of competition on quantities rather than prices.
It is a concern that this could simply reflect changing naming conventions for private funds. There is nothing that requires a fund to use the "Fund I" convention.
Would it be possible to confirm the trend using Form ADV instead of Form D filings?
Form ADV is the form used to register an investment advisor, which is fundamentally different than disclosing a fundraising event. It could definitely be interested to look into. The SEC presents its data in a relatively simple format. Here is the link for Form ADV historical filing data: https://www.sec.gov/foia-services/frequently-requested-docum...
Scaling cuts both ways. You may also be underestimating the aggregate benefits of slight improvements added up across hundreds or thousands of employees.
For a single person, slight improvements added up over regular, e.g., daily or weekly, intervals compound to enormous benefits over time.
The breakeven rate on developer hardware is based on the value a company extracts not their salary. Someone making X$/year directly has a great deal of overhead in terms of office space and managers etc, and above that the company only employees them because the company gains even more value.
Saving 1 second/employee/day can quickly be worth 10+$/employee/year (or even several times that). But you rarely see companies optimizing their internal processes based on that kind of perceived benefits.
Water cooler placement in a cube farm comes to mind as a surprisingly valuable optimization problem.
Standard theories of production clearly distinguish between fixed and variable costs. Moreover, it is well understood that this distinction depends on the time horizon, with more costs being variable for longer horizons.
Moreover, concepts like economics of scale (with low marginal costs of producing an additional unit, as you state as an example) are well understood for certain products in certain circumstances.
The distinction between and relevance of average and marginal costs is taught in undergraduate classes.
Whether or not you can draw a nice diagram of supply and demand is pretty irrelevant for professional economists and our understanding of markets, their dynamics, and equilibria.
How economics is practiced has nothing to do with how it it taught though, which is the topic here.
> The distinction between and relevance of average and marginal costs is taught in undergraduate classes.
Yes, and what's being taught is exactly the problem. Marginal cost is a red herring.
> Moreover, concepts like economics of scale (with low marginal costs of producing an additional unit, as you state as an example) are well understood for certain products in certain circumstances.
This kind of sentences is a good summary of what's wrong with teaching the concept of marginal cost: it assumes that economies of scale is a phenomenon limited to “certain circumstances”, when in reality it affects 90%+ of the economic activities and it shapes pretty much everything around us.
Thinking about marginal costs leads to missing the crucial point of any business, no matter its size or market: breaking even.
I judge technical explanations of audio gear by their description of balanced signals. A common error is to focus on the positive and negative signals having opposite polarity, which is entirely irrelevant for canceling out interference (it may improve headroom, but what is actually important for eliminating common mode noise is to have identical impedance with respect to ground).
I would say this text fails this test, which gives me pause. The description is: "The two conductors carry the same signal, but with reverse polarity (meaning that one conductor carries a signal that is the mirror image of the other). If external noise and interference enters the cable, it will probably affect both conductors equally."
Exactly, if it had been obvious at the time that "the market" would deliver a better return, for certain, then nobody would have bought bonds at those prices.
Then bond prices would have declined (and their expected returns or interest rate would have increased) until, in equilibrium, the anticipation was that the stocks and bonds would deliver comparable expected risk-adjusted returns.
Very few entities have a 98 year horizon. People sure don't. Some insurance companies do I suppose.
A more interesting graph would be to show me the 30 year return at each point along the way. My gues is that stocks would still mostly come out on top, but not the runaway you see here.
In finance there is an ongoing discussion of whether the small-cap premium still exists. For technical discussions, look for the terms "SMB size factor".
You should check the distinction between Bertrand and Cournot competition. Bertrand competition is price competition where the competitor can saturate the market, as you mention. Cournot competition, on the other hand, captures your intuition of competition on quantities rather than prices.