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Monopolistic behavior, like buying out a competitor when there are very few players, CAN be bad for consumers, and should be stopped. But price dumping to driv
by stale2002 9y ago
Monopolistic behavior, like buying out a competitor when there are very few players, CAN be bad for consumers, and should be stopped.
But price dumping to drive out competitors is fantasy boogieman strategy that basically never works. There has to be huge barriers to entry, for it to work. Because if there aren't, then a competitor can just jump back into the market when the prices rise again. It is just not a profitable strategy for a monopoly to engage in.
Price dumping just result in lower prices for consumers.
- lostlogin 9y agoPrice dumping is a great way to destroy competition and has worked effectively in the airline industry (presumably this fits into your high barrier to entry category). The ebook market is presumably easier to enter but far from easy.
- stale2002 9y agoThe airline industry is f'ed up because of geographic barriers to entry and local monopolies. IE, even though there are a dozen or so big players in the airline industry, there is often only 1 carrier going from X to Y. Other examples would include the telecom/internet cable industry, electricity/water.
- aanm1988 9y ago> There has to be huge barriers to entry, for it to work you mean like billions and billions in revenue from a variety of other sources?