4 ms·
> Company A, having been dominant on the market for a long time, can simply tap into their savings and lower its prices, to the point where X is more attractive
by hnuser847 5y ago
> Company A, having been dominant on the market for a long time, can simply tap into their savings and lower its prices, to the point where X is more attractive to consumers than X'. B, new to the market and wo. such substantial savings, cannot compete and goes bankrupt.
If it was this simple, why have so many gigantic corporations gone out of business over the years? Sears was once the world's largest retailer and built the world's tallest building to use as its headquarters. Now it's a penny stock. Why didn't they just lower their prices to push out competitors? Remember every town in America had a Blockbuster and AOL was synonymous with the internet? What happened to those companies?
- frgtpsswrdlame 5y agoBut if Sears or others are replaced with other monopolies then the point stands. For example if you imagine a market where every 20 years the old monopoly firm gets beat out by a competitive new entrant which very quickly establishes it's own monopoly, becomes sclerotic over 20 years and then itself loses, it doesn't really matter to consumers that there is turnover, they are almost always existing in a monopolized market.
- notahacker 5y agoJust because an approach doesn't always work doesn't mean that it is often tried and often successful. Even feudalism had numerous examples of once-powerful barons being deposed, but that didn't mean inherited privilege and killing off weaker competitors weren't characteristics of the system.
- usrbinbash 5y agohttps://www.indigo9digital.com/blog/failureofsears https://www.indigo9digital.com/blog/failureofsears http://www.internethistorypodcast.com/2014/07/what-ever-happened-to-aol/ http://www.internethistorypodcast.com/2014/07/what-ever-happ...