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Posted on: Aug. 25, 2017, 7:11 p.m.
If, like me, you buy the standard “free entry” argument for zero expected economic profits of early entrants, then the only remaining explanation left is an increase in fixed costs relative to variable costs. Now as the paper notes, the fall in tangible capital spending and the rise in accounting profits suggests that this isn’t so much about short-term tangible fixed costs, like the cost to buy machines. But that still leaves a lot of other possible fixed costs, including ... Full investment news articleRelevent to this post: Princeton University Investment Company ,