[quote]LIFTICVSMAXIMVS wrote:
How is a monopoly a bad thing if it does nothing to coerce consumers and continues to offer a product that none can compete with?[/quote]
Prices, on average, are set above true market value. Customers pay more than they would if multiple providers were competing. Prices can be dropped regionally to kill off startups trying to enter the market.
[quote]Ryan P. McCarter wrote:
In the event of competition, a company can simply lower its prices to the point that its competitors cannot possibly hope to compete with it, drive them out of business, then continue business as usual. [/quote]
and eventually there will be a demand for a less shady buisness to supply that product.
The consumer can only be fucked for so long before they look for alternatives.
But if the one company is selling the same thing for far less money, the economic incentive is usually going to outweigh other things.
[quote]pookie wrote:
rainjack wrote:
I do know.
Yeah, you keep repeating that. What’s odd is that you’re apparently unable to use that knowledge to make or support arguments. Was my question too difficult?
Let’s say there are four or five oil companies selling gas in a country. What prevents them from banding together and raising their prices above market value?
I’m picking that example because we in Canada tend to pay more for our gas than you do in America. And that’s not due to tax issues. If you subtract all taxes, state and federal, from the price of gas on both sides of the border and adjust for dollar differences, you’ll note that gas prices in the US follows the price of crude much more closely than it does here in Canada. When the price of the barrel goes down, our price at the pumps also go down - eventually. Often, there are days or weeks of slow decline while prices in the US drop the next day or within a few days. The few articles I’ve read about that topic all pointed to our anti-trust laws as the culprit, because our AT laws are apparently much harder to apply in courts than yours are.
According to you, the free market should rectify prices on both sides of the border, but it doesn’t seem to do so as effectively here. Why is that? If monopolies simply cannot form on their own, and anti-trust laws are useless, then why are we feeling the effect of an oligopoly subtly controlling the market?
[/quote]
If the monopoly in question is selling it’s products for fair prices, then there is nothing wrong with a monopoly.
If the prices get too high in a free market, there will be someone to offer a comparable substitute - assuming that the government stays the fuck out of the way. Now, are you willing to do what you have to do to as a consumer to support these new innovations? If yes, then there is no monopoly. If no, then the price is not too high.
You have a problem in Canada that is the same problem in all economies: too much government. You make the mistake of thinking that there is not enough. I’m sure the oil companies knows everyone in your government by their first name.
Market value is what a willing buyer is willing to pay a willing seller.
[quote]Ryan P. McCarter wrote:
But if the one company is selling the same thing for far less money, the economic incentive is usually going to outweigh other things.[/quote]
how often can the price inflate and deflate based on coming competition before the consumer changes providers?
[quote]pookie wrote:
dhickey wrote:
Name one that had ill effect before anti-trust laws.
Standard Oil.
[/quote]
Please explain the ill effect Standard Oil had on consumers. You picked the easiest to rebut, thanks.
[quote]pookie wrote:
rainjack wrote:
I do know.
Yeah, you keep repeating that. What’s odd is that you’re apparently unable to use that knowledge to make or support arguments. Was my question too difficult?
Let’s say there are four or five oil companies selling gas in a country. What prevents them from banding together and raising their prices above market value?
[/quote]
You really are making this way too easy. You must not realize that this is exactly what gov’t is doing. Exactly.
[quote]Ryan P. McCarter wrote:
That’s because the profit motive that makes a monopoly injurious to the public is not nearly as strong in a government monopoly. Not that they are perfect, they come with their own benefits and drawbacks, but at least a government monopoly is subject to some sort of regulation
[/quote]
100% backwards. Who is regulating the regulators?
Ok, this is just plain lunacy. Why don’t you try a simple exercise of “follow the dollar”. Start tracing out where any profits go. It’s not that hard. You could at least put a little effort into this.
this wouldn’t have happened without our wonderful gov’t. This is the point that is being argued. There has not been a single instance of a Monopoly having ill effect in this country without the help of our gov’t.
Read about Henry Hill if you would like to see how much better the railroad industry could have been without gov’t medaling.
[quote]pookie wrote:
LIFTICVSMAXIMVS wrote:
Well, I don’t know about any petrol boycotts, but I know what effect lessened consumption of said petrol has had in the recent past.
And how have profits been affected?
[/quote]
Are you serious? Have you not seen what happened to the price of oil? How do think that has effected profit?
[quote]pookie wrote:
LIFTICVSMAXIMVS wrote:
How is a monopoly a bad thing if it does nothing to coerce consumers and continues to offer a product that none can compete with?
Prices, on average, are set above true market value. Customers pay more than they would if multiple providers were competing. Prices can be dropped regionally to kill off startups trying to enter the market.
[/quote]
Again, where has this ever happened with gov’t help. Even you ill selected example, standard oil, kept cutting prices while owning 90% of the market. When did prices start going back up?
I am unaware of any example where the consumer has been screwed.
[quote]Ryan P. McCarter wrote:
But if the one company is selling the same thing for far less money, the economic incentive is usually going to outweigh other things.[/quote]
Ummm…yeah. This is called an efficiency monopoly and is good for the market. Try a book on basic economics and then maybe you understand the difference between an efficiency monopoly and a coersive monopoly.
[quote]zephead4747 wrote:
Ryan P. McCarter wrote:
But if the one company is selling the same thing for far less money, the economic incentive is usually going to outweigh other things.
how often can the price inflate and deflate based on coming competition before the consumer changes providers?[/quote]
In a free market? perpetually. think about how many transactions take place every day. The market responds instantly.
By and large, the market can handle potential monopolies, and the government needs limited involvement in trying to promote competition - but that doesn’t mean that regulation has no place.
Even though competitors may be able to overcome a monopoly’s aggressive attempts to put up barriers to entry, that takes time and incurs transaction costs. The more powerful a monopoly, the higher than transaction costs.
As such, there is a role for business “torts” - a legal wrong whereby certain acts can be punished for harming business by discouraging acts that stifle competition. We want to disincentivize monopolies from joining cartels, etc. - because even if they can be overcome, we want to keep such activities as scarce as possible.
And, the benefit of such laws is also the mere threat of them, much in the same way punitive damages operate.
What is wrong with you? That’s exactly what I said. Just read a post instead of replying to what you “think” it said. Just to clarify, no one here is letting government off the hook.
[quote]dhickey wrote:
Ryan P. McCarter wrote:
But if the one company is selling the same thing for far less money, the economic incentive is usually going to outweigh other things.
Ummm…yeah. This is called an efficiency monopoly and is good for the market. Try a book on basic economics and then maybe you understand the difference between an efficiency monopoly and a coersive monopoly.[/quote]
Umm…yeah, after they have no competition anymore, there’s nothing to keep them from raising prices again. Or, what’s probably more likely, cutting quality without necessarily raising price a great deal.
[quote]rainjack wrote:
If the monopoly in question is selling it’s products for fair prices, then there is nothing wrong with a monopoly.
If the prices get too high in a free market, there will be someone to offer a comparable substitute - assuming that the government stays the fuck out of the way. Now, are you willing to do what you have to do to as a consumer to support these new innovations? If yes, then there is no monopoly. If no, then the price is not too high.
You have a problem in Canada that is the same problem in all economies: too much government. You make the mistake of thinking that there is not enough. I’m sure the oil companies knows everyone in your government by their first name.
Market value is what a willing buyer is willing to pay a willing seller.[/quote]
You don’t explain why gas prices track closely crude prices in the US and less so in Canada.
We both have anti-trusts laws. Ours are harder to apply in court; we have to prove malicious intent to defraud the customer or something like that. Easy to assert, difficult to prove.
What I see is that better anti-trust laws, such as yours, benefit the customer. We get fucked at the pump - however subtly - because our AT law isn’t good enough.
The price gouging isn’t severe enough, nor lasts long enough for there to be any incentive for new competitors to enter. Over time though, Canadian gas consumers get fleeced for billions of dollars that aren’t justified by market value.
[quote]Ryan P. McCarter wrote:
dhickey wrote:
Ryan P. McCarter wrote:
But if the one company is selling the same thing for far less money, the economic incentive is usually going to outweigh other things.
Ummm…yeah. This is called an efficiency monopoly and is good for the market. Try a book on basic economics and then maybe you understand the difference between an efficiency monopoly and a coersive monopoly.
Umm…yeah, after they have no competition anymore, there’s nothing to keep them from raising prices again. Or, what’s probably more likely, cutting quality without necessarily raising price a great deal.
[/quote]
So I take it that you oppose nationalized healthcare?
[quote]dhickey wrote:
Again, where has this ever happened with gov’t help. Even you ill selected example, standard oil, kept cutting prices while owning 90% of the market. When did prices start going back up?[/quote]
Standard Oil was an efficient business and did cut prices. But those prices were never as low as they could’ve been had there been competition. Prices were lowered regionally when competitors tried to enter the field; saboteurs were hired to destroy machinery; transporters or suppliers got “punished” for dealing with competitors, etc. S.O. used any means necessary to keep control of the industry. When supply was too abundant, production was restricted to keep prices up.
So while volume and improvements in refining technology did bring prices down, those prices were still higher than they would’ve been had there been true competition on the market.
Standard Oil was basically OPEC before OPEC. Do you think OPEC is an efficient business that benefits the end costumers?
[quote]thunderbolt23 wrote:
And, the benefit of such laws is also the mere threat of them, much in the same way punitive damages operate.[/quote]
That alone is enough to explain why Canadian gas prices stay higher. The threat from our AT law is lesser. We get gouged.
[quote]pookie wrote:
rainjack wrote:
If the monopoly in question is selling it’s products for fair prices, then there is nothing wrong with a monopoly.
If the prices get too high in a free market, there will be someone to offer a comparable substitute - assuming that the government stays the fuck out of the way. Now, are you willing to do what you have to do to as a consumer to support these new innovations? If yes, then there is no monopoly. If no, then the price is not too high.
You have a problem in Canada that is the same problem in all economies: too much government. You make the mistake of thinking that there is not enough. I’m sure the oil companies knows everyone in your government by their first name.
Market value is what a willing buyer is willing to pay a willing seller.
You don’t explain why gas prices track closely crude prices in the US and less so in Canada.
We both have anti-trusts laws. Ours are harder to apply in court; we have to prove malicious intent to defraud the customer or something like that. Easy to assert, difficult to prove.
What I see is that better anti-trust laws, such as yours, benefit the customer. We get fucked at the pump - however subtly - because our AT law isn’t good enough.
The price gouging isn’t severe enough, nor lasts long enough for there to be any incentive for new competitors to enter. Over time though, Canadian gas consumers get fleeced for billions of dollars that aren’t justified by market value.
[/quote]
Can another oil company start up in Canada?
Gas pump prices track with the NYMEX price of gasoline. If you think there isn’t price gouging going on in the US - you should look at the price of diesel here. Far cheaper in quality and production cost to gasoline, but was running over $1 gallon more at the pump than unleaded gas.
I think our laws are TOO strict. Hell, Microsoft is always in court - but do they have a monopoly? I would argue that they don’t.