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TRADITIONAL MARGINS AND THE IMPACT OF A COST‐SAVING INNOVATION
Author(s) -
Bowbrick P.,
Taluntais An Foras,
Feeney P. J.
Publication year - 1981
Publication title -
journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.157
H-Index - 61
eISSN - 1477-9552
pISSN - 0021-857X
DOI - 10.1111/j.1477-9552.1981.tb01558.x
Subject(s) - margin (machine learning) , product (mathematics) , business , commerce , product innovation , industrial organization , agricultural economics , economics , mathematics , geometry , machine learning , computer science
Retailers tend to have a traditional level of mark‐up and to charge the same mark‐up even if the product is improved so that waste is reduced. Under these circumstances the result of improving a product is that producers sell less at a lower price, consumers buy more at a lower price and retailers obtain a larger percentage margin. The producers suffer as a result of their innovation. Excess capacity at retail may be caused.