However, I would like to point out that my client Coppernob, which has been a respected design company supplying every major name on the British high street since forming in 1976, has incorporated Macromedia Flash into their Web site since July 1997. Therefore, Paul Smith is not the first fashion designer to employ Flash technology from Macromedia. The Coppernob site can be found at http://www. coppernob.com.
Eva Pascoe's column on predatory pricing (17 February) states that the relationship between marginal cost and price is crucial in deciding the fairness of a company's marketing strategy:
"persistent marketing of a product (ie, the Times) at a price well below marginal costs of production is coming to an end".
As I understand it, the important relationship is between the price a firm sets and its average costs of production. It is quite possible to set a price below marginal costs and sustain production indefinitely. A firm cannot price its product below its long-run average costs and hope to remain in business without subsidy.
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