Show BUSINESS t t I OUTLOOK FOH FOIt 0 It Till TILE M Since history has clearly revealed that an almost perfect relationship exists between domestic paper pallor consumption and changes In the real Gross National Product It is not lOt surprising that the process of or converting trees into paper is among the most cyclical of or all businesses Intensifying this aspect of or the industry is the bitter bilter corn com petition between Posting annual related paper sales ales of more than million are arc at least 15 companies most employing ing similar production techniques and anI many vying for forthe forthe forthe the same markets Also because paper manufacturing demands very to costly lIy equipment overall ef- ef is is the prime determinant determinant determinant deter deter- of profitability While production schedules and employee productivity must be closely monitored a careful breakdown reveals that idle capacity is the industry's commonest and most costly lorm norm of inefficiency For this reason leason producers in an attempt at at- attempt tempt to avoid the higher unit to costs ts associated with low output volume are quick to hold down downor 01 or oven i reduce educe prices during K of weak demand So that are arc heavily leveraged or and plagued with ith ov overcapacity ei capacity are arc understandably un un- penalized the most by h such competitive pi practices act ices ices During Daring periods of expanding demand on the other hand hanI plants with extra capacity benefit t from firmer pi prices ites und and the savings inherent in ill high volume production on |