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That works against a large new entrant. No industry is going to lower their massive collective profit just to shoo away a small new entrant.
by creer 2y ago
That works against a large new entrant. No industry is going to lower their massive collective profit just to shoo away a small new entrant.
- throwup238 2y agoLumbermills are a local industry since transportation is a very significant fraction of the final cost. No one is shipping wood from Oregon to a mill on the East coast to sell to a construction company in California, so every mill is very much sensitive to local competitors. Ironically it's the larger mills that are insensitive to this dynamic, since they supply huge national customers like the big box stores or export to international markets. If Home Depot or Lowes decide their suppliers need a new mill, they finance it and it gets built.
- creer 2y agoThis is what suprised me when I did a (very cursory) look in there. It seems some mills do ship back and forth quite a ways along the West Coast. And I don't know that Home Depot and Lowes have that much of the market. They are not the ones that serve large construction projects. But if they did, it would be enough of a long term market that they could influence prices by funding new mills in exchange for more say into the price, a share of any profit, both, whatever. If they had this capacity, they could solve this funding issue.
- deleted 2y ago[deleted]
- jmalicki 2y agoNatural monopolies due to high capital costs are businesses like TSMC and ASML - you're not going to get a "small new entrant" with 4nm lithography for making high-end microchips.
- creer 2y agoTSMC, ASML are as extreme as it gets. You might as well ignore them completely in this thread.
- jmalicki 2y agoThere are local versions - a veterinary emergency hospital with veterinary oncologists and cardiologists in a smaller city without other metros for hundreds of miles, for example.
- nothercastle 2y agoThat’s an example where the market can only support one of there was ever a competitor it would be a question of who runs out of cash first.
- jmalicki 2y agoWhich is why no smart competitor would enter into that market - you'd never make back the profits from the price war.