From: T0Morrow@aol.com
Date: Fri Jan 18 2002 - 00:24:17 MST
>>How Pfizer shifts its costs does not matter to me, as it concerns only that
>>company's shareholders.
>
>That's impressive! They don't pass the cost on to their other customers?
>How do they *manage* that?
>
>Damien Broderick
They might manage it in a number of ways, given that retail sales do not
constitute the only source of funding for a company. They might, for
instance, choose to sell assets, or take a write-off, or assume a debt, or so
forth. You might find modern corporate finance quite sophisticated, were
you to think a bit about its potential applications in this case. And, at
any rate, even if Pfizer does try to subsidize its program through increases
in other sales of other retail items, I still would not care much. With
regard to most of its products, it faces competition from alternative (even
if not exactly equivalent) products. That competition would let consumers
avoid paying the subsidy on Pfizer's behalf, natch. And even with regard to
those products in which it enjoys market power, most likely due to patent
rights, it does not sound plausible to assume that their cost-shifting
program will effectuate price increases. Why? Because it is most likely
Pfizer was already maximizing its monopoly rents with regard to those
products. I trust I don't have to spell out the incentives and mechanisms.
I find off-topic discussions by others tiresome, and suspect this never *was*
suitable subject matter for this list, and so will let it go at that.
T.0. Morrow
http://members.aol.com/t0morrow/T0Mpage.html
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