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This can benefit the consumer at the expense of the supplier. The lower Walmart can lower the price, the lower Walmart can offer the product.
by NeonVice 7y ago
This can benefit the consumer at the expense of the supplier. The lower Walmart can lower the price, the lower Walmart can offer the product.
- scarface74 7y agoIsn’t that basically Adam Smith Capitalism 101 that any commodity good’s profit tends toward $0?
- dodobirdlord 7y agoMore or less. In a competitive system profit margins should trend downward. They won't necessarily reach 0 in the limit, because at some point you'll reach the point where everyone has something better to do with their resources than move into your market and undercut you (and you have no better prospect by undercutting anyone else). A profit margin of 0 is a stable equilibrium, but equilibria can also be reached when everyone's profit margin is sufficiently low that the fixed costs of starting a competitive business are larger than cumulative expected profits over a long time horizon.
- TheOtherHobbes 7y agoThis factoid has failed so many times it's astonishing it keeps being repeated. Any competitive system tends towards monopoly/oligoply. Market mechanisms encourage monopoly/cartel price/payment fixing that benefits shareholders/owners through strong-arming of downstream businesses, and - depending on the market - of customers. There is no "moving into the market", because as soon as a market consolidates around one or $very_small_number of players, cost of entry and market capture make competition impossible. So competition ends. This is where we are now with tech. It's basically impossible for anyone new to compete with Amazon, Google, Facebook, etc. It's also where we are with established players in other sectors such as Airbus. The only two things that can break the logjam are government action to split up monopolists, and the invention of a new market space with a viably low cost of entry.
- ernst_klim 7y ago> Market mechanisms encourage monopoly/cartel price/payment fixing that benefits shareholders/owners through strong-arming of downstream businesses Not market mechanism, governments protecting big biz. Without legislative protection a monopoly doesn't last long, as Standard Oil example shows. A typical cycle of crony-capitalism is: build big biz on a new market -> lobby heavy regulatory framework and a set of monopoly rights which make entering impossible for any new competitor -> push your shills in some agency like FAA, FCC or FDA -> enjoy your unconditional domination. > The only two things that can break the logjam are government action to split up monopolists This factoid has failed so many times it's astonishing it keeps being repeated. A century of anti-trust failures without a single example of a decent outcome, yet people still bring this up.
- specialist 7y agoWhat's the "anti-trust failure"?
- stale2002 7y agoWhat is happening to prices in the online retail market? Are prices high, or are prices so competitive, so low, so good for consumers, that competitors have literally been complaining about it for years? Now, tell me again why you think prices aren't competitive?
- soulofmischief 7y agoHow would one split up Facebook? Amazon? What would it look like?
- AlexandrB 7y agoFacebook is easy. Break off Instagram and WhatsApp. Those acquisitions should never have been allowed. Amazon might look like splitting retail from AWS or similar.
- anthonypasq 7y ago