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> creates a monopoly, then jacks their prices up And then, very quickly, realizes to the surprise of no economist that they are no longer a monopoly.
by baddox 10y ago
> creates a monopoly, then jacks their prices up
And then, very quickly, realizes to the surprise of no economist that they are no longer a monopoly.
- JBReefer 10y agoThat's the part where its a misapplication. These are fundamentally websites we're talking about, not steel mills. The barriers to entry, especially for competitors operating in other states, are incredibly low. No new roads, no new ports, no mineral leases, etc.
- st3v3r 10y agoIt's not just a website, though. There's the services offered through the website. And while there might be some competitors that come in (no guarantee of that), it'll still take time. Time which the entrenched monopoly can use to entrench itself further.
- pulisse 10y agoBarriers to entry aren't the only thing protecting a monopolist's position. In many markets, network effects work against a newcomer's ability to acquire customers.