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>Competitive markets are by far more the exception than the rule it's just not how capitalism works Empirically this absolutely isn't the case; the majority of
by logicchains 2y ago
>Competitive markets are by far more the exception than the rule it's just not how capitalism works
Empirically this absolutely isn't the case; the majority of listed companies have fairly low margins, especially non-tech companies, which can be trivially seen from their financial statements. A low profit margin means a competitive market (because if it wasn't a competitive market the firm could raise its prices to obtain higher margins).
- deleted 2y ago[deleted]
- dambi0 2y agoMight there be other reasons to report lower profits?
- littlestymaar 2y ago> A low profit margin means a competitive market (because if it wasn't a competitive market the firm could raise its prices to obtain higher margins). Not necessarily: if prices are elastic then even a monopoly can aim for low profit margin (in percentage) in order to increase profit. What matters is how much total profit are being made, margin only matters when measuring risk. Also, corporations are social structures, and low competition also encourage complacency in the corporate structure itself, which drives costs up and reduces profit margin.
- zuckerma 2y ago[flagged]
- laserlight 2y agoIn addition, a low profit margin may increase lifetime profits by deterring potential competitors.