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Wouldn’t that kind of behavior make a company seem less like a monopoly, and extend the time to government intervention?
by mvid 7y ago
Wouldn’t that kind of behavior make a company seem less like a monopoly, and extend the time to government intervention?
- acover 7y agoNo, I believe it will make them appear like a monopoly and the consumers as a monopsony. For example, imagine if amazon caves to the consumer group and makes toothpaste $1. Then suddenly the other sellers of toothpaste all charge $1. That would show amazon had pricing power over the market and that amazon is in fact a monopoly. Further it would show that amazon was using it's monopoly power to gain excess profits. Note: I'm not an expert in economics and have a habit of being wrong.
- URSpider94 7y agoWhat you have described is an oligopoly. Think airlines, or gasoline, or soda. All airline tickets from point A to point B in coach are basically interchangeable, so if one airline has a fare sale, everyone else has to follow or risk flying empty planes. Same, if one gas station on the corner is $.05 cheaper than the other one, they’ll get all the business. Airlines and gas stations are most, most definitely not monopolies.