Tuesday, February 14, 2006

Back to Basics

Stephen Green takes us back to Econ 101:

"Let's pretend that I run two businesses. Widgets Inc enjoys sales of a million dollars per year, with net profits of a half million. At the same time, Doohickey Corporation has earnings of a billion dollars, with net profits of 20 million dollars per annum. Now let's say that you have a million dollars, and you want to start a new business to compete with me. Would you rather make widgets or doohickeys?
If you answered "Doohickeys," then you're an ignoramus, or you might be Jimmy Carter."


As always, read the whole thing.

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