Monday, March 31, 2008
College Visit
I was visiting a college this weekend and realized a few things about college life that I never realized before. I met with a professor in the business school and he explained a lot of things to me I didnt really expect to hear when I talked to him. He talked about long term and short term abalysis and used the specific example of a switch for a fan. The switch had five buttons each corresponding to a different amount of time to leave the fan on for. He was impressed by this particular switch and wanted to buy some more for other spots in his house. He made great efforts to find the switch and finally he called the company who in turn told him they no longer made it. He asked why and was told by a representative of the company that a cost/benefit analysis was conducted on every product the company produced and that particular product did not check out. He was maddened by this and did his own research, at least he claimed, and found that the short term profit would not have been very good, but in the long run the product would have been worth keeping. Im not sure what I'm trying to say other than it was interesting going on a college visit and getting a lesson in economics.
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2 comments:
Sounds like you and the professor had a cute little chat John, but I find it interesting how much a little thing such as a switch can spur someone to delve deep into something such as that. Also I believe that the analysis about the short run would be correct, because not many people would first off need/think about a product such as this, but there is no telling what can happen after a product has been in the market for a while.
John.
like matt stated, i am glad you and the prof. had a nice little chat. Also, i have not recently given as much thought to a fan switch as he has. but about the economics portion, i believe the professor is correct. Like we have studied with our graphs in class, at first, in the short run, a company may not make a profit, however, it is possible that in the long run, the demand will change in order to meet the cost of producing the product and therefore make it profitable to produce. Long sentence.
Alright John. sounds good.
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