determine profit margin
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determine profit margin

First of all, it costs transaction cost for the manufacturer to purchase intermediate products in the market. It includes the cost of seeking suitable suppliers, signing contracts and supervising contract execution. If the manufacturer can produce some intermediate products within the enterprise itself, it can eliminate or reduce some transaction costs, and can better guarantee the quality of the products. Second, if the manufacturers need is a special type of specialized equipment, the supplier does not generally willing to specialize in only a buyer of the product of the investment and production, because this kind of proprietary investment risk is bigger. Therefore, vendors that need this specialized device need to solve the problem of specialized devices within the enterprise. In the end, the manufacturers hire employees with specialized skills, such as specialized product design, cost management, and quality control, and establish long-term contractual relationships with them. This can be more beneficial than buying the corresponding services from other vendors, thereby eliminating or reducing the corresponding transaction costs. According to the latest data released by the U.S. Department of Transportation, the number of driving miles (VMT) in October 2017 is 268 billion miles, up 0.8 percent year on year and 0.2 percent month-on-month. According to the data, total vehicle mileage is expected to reach 2.685 trillion miles in 2017. With the expansion of the global economy, Mr Trump may hope that tax cuts and deregulation will spur enough growth and create enough jobs that he will boast about. A 2 per cent potential growth rate does not necessarily help his blue-collar base, but it could at least push the stock market to its highest ever level. Although, of course, including republican all mainstream economists agree that, regardless of his policies, potential growth rate will remain at about 2%, still trump will claim that the U.S. economy can grow at 4%.