8 ms·

This doesn't make rational sense. Investments aren't financed by customers, they're financed by investors. I reckon in today's money-printing world it's easy

• deleted 5y ago
  [deleted]
• lumost 5y ago
  In certain cases the requisite machine required can inherently run at a capacity larger than the market would ever require. In the case of new competition the response of the monopoly holder would be to simply discount prices by X% for N years until the new entrant goes bankrupt. In the case of presses, as the Capex was paid ~70 years ago by the incumbent they have an intrinsic financial advantage against an upstart. It's a bad deal for investors to race to the bottom with an existing market player in a commodity business. It only makes financial sense for customers who dislike the marginal rate or feel there is a security need requiring their own supply chain. The only way to break out of this would be a technical invention which allowed lower capacity production or technical innovation obviating the need for the monopoly. In the case of an industrial press this is a less likely outcome due to the physics of the machine and the intended application.