Gnomon Puts in Its Two Cent's Worth; Ec 10 Will Have to Find a New Example

Last fall section instructors in Economics 10 used a price war between two Harvard Square photocopying firms as an example of "predatory pricing."

Employees of the competing companies, Gnomon Copy and the Copy Cast service located inside the J. August clothing store, picketed and distributed leaflets outside each other's stores on Mass, Ave., along what the Wall Street Journal once called the "Sunset Strip of Copying."

The price war began in late October when J. August started charging a flat rate of two cents a copy, underselling Gnomon's price of three cents for the first ten copies of an order and two cents a copy thereafter.

Gnomon lodged a compliant with the Massachusetts attorney general, claiming J. August was illegally selling under cost. But the attorney general's office never took action on the matter. Gnomon also fought back directly by offering the J. August price to customers who specifically requested it.

John J. Sytek, Gnomon's vice-president, said yesterday the price war didn't hurt Gnomon's business. Only about 5 per cent of Gnomon's customers asked for the J. August price, he added.

James Jacobs, J. August's owner until last December 31, claimed last year that the price drop had increased his business substantially. He could not be reached for comment this week.

The picketing and leafletting lasted only a few weeks, and the war finally ended in April when J. August hiked its prices to compensate for the purchase of a new copying machine.

Jody Brown, assistant manger at J. August, said yesterday the store's current price of five cents a copy for a minimum order to five, and three cents a copy for orders over ten, reflected the superior copying capabilities of the new Xerox 9200.

Gnomon's prices have not changed.