3 ms·

The free market normally takes care of price gouging by drawing in new entrants. If the barriers to entry are too high, then price controls or nationalization.

• notch656a 4y ago
  >If the barriers to entry are too high, then price controls or nationalization. Or remove the barriers, like regulation/licensing/taxation.
  • nHD93pTC78g6wvE 4y ago
    The barrier is capital expenditure, not regulation/licensing/taxation. Besides, any competitor entering the market would be expected to make just as much or more profit as the existing companies. Which means they would price their product just the same as the existing companies.
    • notch656a 4y ago
      >The barrier is capital expenditure, not regulation/licensing/taxation. I don't think you can just decide by fiat that things like regulation and licensing aren't barriers. Taxi medallions before Uber comes to mind. >Besides, any competitor entering the market would be expected to make just as much or more profit as the existing companies You also cannot just decide by fiat that adding more competitors mean the same amount or more profit. I don't think it is a very popular economic opinion to believe that adding more competition raises the profit. I do not understand why any rational competitor would expect their profit would be higher with more competition, unless they have some kind of edge.