4 ms·
If the company charges higher "just because" then it creates an inefficiency in the market and allows new products to enter the market at a lower price point. I
by robjan 6y ago
If the company charges higher "just because" then it creates an inefficiency in the market and allows new products to enter the market at a lower price point. If they charge higher due to taxes it doesn't create this gap.
- Retric 6y agoMonopolies can always lower prices at any time a new player enters the market. Theoretical future competition has zero impact on current prices. Just look at what happens to drug prices when the original patent expires. Similarly, ISP prices maintain high until just before a new options become available. Simply announcing Google fiber was eventually going to enter a city did not instantly lower prices. Sure, eventually that happened but ISP continued to charge high prices until forced to lower them.