Keyword: software
The High-Tech Treadmill (6/22/2001)
The profit of New Economy business firms that have very high R&D fixed costs and very low marginal costs is brutally squeezed in economic downturn.
Keywords: average costs, business cycles, competitors, demand, fixed costs, hi-tech companies, investment, loss, marginal cost, new economy, obsolescence, profit, R&D, sales, software, upgrading, venture capital
The Snowball Effect (11/9/2001)
Knowledge-based industries subject to increasing returns because of high R&D fixed costs and low variable costs naturally tend to monopolize the market.
Keywords: Adam Smith, avalanche, diminishing returns, fixed cost, increasing returns, lock in effect, marginal cost, natural monopoly, negative feedback, network externality, operating system, positive feedback, R&D, snowball effect, software