Will Prices Or Production Be Cut?

AFTER years of effortless selling, a buyers' market has returned in some industries; in others, it is just around the corner. It is a strange kind of buyers' market, coming, as it does, in the midst of what is still a boom economy. For businessmen it raises an important question: When sales drop, should production be cut to bring it in line with sales, or should prices be cut to keep sales up with production?

The problem of price cuts v. production cuts is not a simple, either/or proposition. There are many other ways to counteract falling...

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