Nature of Competition: Machine Power Rental 03
Through the last couple of decades in the 20 th century, “ outsourcing ” was one of the buzz words in business. The implication: More often than not, “buy” from outside was more efficient (M ∙ U ∙ T -1 ) than “make” it inside, notwithstanding “ the Nature of the Firm .” At any rate, “Rational People Think as the Margin.” Subject to: ① the fully-functioning machine is the marginal unit, as opposed to the infinitesimal thereof; ② the divide between “to invest or not to invest” is the rate of return 2% PA; ③ “make or buy” is a judgement call after thinking at the margin . Free to choose. At the capital budgeting , the firm has, again, two alternatives, insourcing the machine and outsourcing the machine. Likewise is upon internal construction; that is, renting it in and selling it out. In the Republic on the basis of free will a...