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In a free market, over time, competition in the production of a commodity product will eliminate all profits. Bread-makers can sell their bread for enough money to cover the cost of the capital invested in the bakery, the cost of the flour, yeast, sugar, and water, the fuel needed for firing, and the salary of the baker. They can earn no more money than that. If they did, then another bakery would be established which would price its products lower, splitting that profit between the customer and the owner of the new bakery. In order to earn a profit, you need to do something special (called a franchise).

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Created by snotbutter 15 years 41 weeks ago
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