4 ms·

They do it through the fact that being a monopoly or oligopoly is inherently more profitable than not being one, so if you don't play along you're basically lea

• stale2002 11y ago
  When monopolies exist, that means that there is currently money being left on the table. Someone ELSE can come it, charge less, and get all the customers to go to them instead. This is what allowing more houses to be built would do.
  • michaelt 11y ago
    For infrastructure companies, Once you have a national monopoly if any small company undercuts your prices you can cut your prices in their area only, subsidised by profit from the rest of the country, so the upstart loses money on their investment. Thus preventing them from bootstrapping, or demonstrating profits to investors.
  • aninhumer 11y ago
    >Someone ELSE can come it, charge less, and get all the customers to go to them instead. Except there are huge entry costs, and all that theoretical ROI disappears as soon as you enter the market, because the existing monopoly starts competing. To make a profit, you need some advantage over the them, like efficiency, innovation or goodwill. If all you can do is exactly what they do but at market price, well... they can do that too.
    • stale2002 11y ago
      How would that apply to the Bay Area Housing market? If someone started building a whole bunch of housing in SOMA, do you believe that this ROI would disappear quickly, due to housing prices hitting rock bottom? Do you really believe that would happen?
      • aninhumer 11y ago
        No, I was mostly arguing generally, that a monopoly can exist without it being the government's fault. But I think it's fairly clear that the housing market is indeed strongly influenced by regulation.