3 ms·
Realistic and historically accurate: Pepsi starts collecting the extra profits with zero price reductions.
by pdimitar 3mo ago
Realistic and historically accurate:
Pepsi starts collecting the extra profits with zero price reductions.
- fc417fc802 3mo agoIn a duopoly, probably yes. However in a more competitive environment where several incumbents have achieved a given optimization a race to the bottom is likely to occur because it only takes one of them preferring to increase their relative market share to kick the process off.
- SoftTalker 3mo agoThe cola market is effectively a duopoly.
- eru 3mo agoBarriers to entry ain't exactly high.
- SoftTalker 3mo agosacrificing even more profits that may be had by undercutting coca-cola's price? The CEO would be fired.
- pdimitar 3mo agoReally depends on the concrete numbers and the projections. You could be right, I could be right, I am only saying what I've witnessed historically in general. Greed trumps a lot of other fairly rational courses of action.
- DangitBobby 3mo agoMarkets generally don't follow Econ 101. There are effects beyond first order when it comes to pricing.