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December 07, 2005


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Wal-Mart is big but it's not a monopolist. It has to sell at low prices to survive. But that does not mean it makes big profits. In fact, it's profit margin is razor thin, especially when compared to real monopolists like Microsoft. Obviously Microsoft does pay it's workers better than Wal-Mart, but if it's good for consumers is another question.

We have two models here:

Wal-Mart: low wages - low prices - low profits

Microsoft: high wages (or rather high earnings) - high prices - high profits

Which is better?

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