Re: Dumping.
[ QUOTE ]
[ QUOTE ]
Why are some people against dumping? How is it unfair competiiton?
If person B sells ham at 10 dollars, and I sell my ham at 5 dollars , make the other guy go broke then sell my ham at 15 dollars I will atract competition. I dont see how the price of my ham will stay at 15 dollars on the long run, am I overlooking something obvious?
[/ QUOTE ]
In the real world, developing a product costs a lot more than getting a pig and slaughtering it. If it costs millions or even billions of dollars to develop something, and there is a great likelyhood that someone will undercut my prices, why would I enter such a market?
[/ QUOTE ]
You would do it if you thought your manufacturing technique would be lower average cost than the existing market players. It would not be hard to get venture capital to develop and support your enterprise if it really was better. Liquidity in the capital markets helps this process along tremendously.
Even if you can't compete so well on average cost, you can attempt to differentiate your product so long as the product isn't too commoditized.
The only products where predatory pricing (selling at below average cost) *might* be a concern are highly commoditized products with a pre-existing highly efficient manufacturer.
Does anyone know of examples of predatory pricing?
|