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Old 09-24-2007, 03:36 AM
BCPVP BCPVP is offline
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Join Date: Jan 2005
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Default Re: Monopolies wouldn\'t exist in the free market?

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Isn't this exactly predatory pricing?

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Something tells me there's more to it than that. The model most people describe involves the predator company charging monopoly prices once it is established because they need to make up for the low price during the predation period and because they are now the only firm in the area and can "threaten" potential entrants. Lots of businesses start out with discounts, low prices, etc to gain a foothold in the market otherwise there probably won't be much reason for customers to switch. Unless the new stores offer something different which defeats the point of it being predatory.

I won't say that it's impossible to engage in predatory pricing for a time. But it is very difficult for reasons mentioned as well as documented by many people and so rare that it shouldn't merit the powers conceded to government to "deal" with such practices.
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