The justification for government

[clowntable]

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You are just assuming that somehow the production costs of the monopolist cannot be approached by the would-be competition. Your whole hypotheitcal falls apart without this assumption.

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Almost correct, feel free to prove it wrong. And no, it doesn't completely fall apart. I assume that the likelyhood of a competitor succeeding is so little that it's not worth taking the risk (investors will instead invest in the monopolist).

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Because you are reaping above average profits because of your monopoly position, and capitalists like to make money.

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Why would they not invest in the monopolist?

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You are making above-average profits providing a product that is in high demand. This invites competitive investment from all over the economy. That investment will produce competiting products. That's how the market works.

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"That's how the market works" because there is government protection against monopolies.
Once again you defend the fact that no government protection is neccessary by using examples from economies with government protection. Or do you want to say that the fact that government protection against monoplolies exists has no influence on the decisions of investors to invest in competitors?

[IsaacW]

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This is plain wrong. Companies do not comete on price, they compete on cost. All the items you mentioned drive up cost.

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Companies compete on perceived value to the consumer. All the items I mentioned increase the price the consumer is willing to pay because they improve the perceived value. If companies really competed only on cost, there would be no advertising.

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Reworking the manufacturing process: short term cost, while at the same time taking a loss from selling above costs. I'm not saying it is impossible to do but I think the risk is quite high (especially if there is a takeover offer once your profits drop due to the short term unprofitability)

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Just because the monopolist is selling at 5 units does not force me to sell my product at 5 units. I can keep my price at 8 units to maintain my per-unit profit and deal with the associated reduction in volume while I work to improve manufacturing efficiency so I can eventually lower my price.

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Repositioning of the product: cost and we could have the "stuck in the middle" argument here but I won't do it [img]/images/graemlins/wink.gif[/img]

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You are focusing on cost when that is only one piece of data used by a company setting a price for a product. The fact is that we can see these types of strategies working out in the market today; the presence of a (current) monopolist does not change the basic idea that competition will drive producer prices and consumer prices together.

[NeBlis]

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That's how the market works" because there is government protection against monopolies.


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ROTFMAO .. the government does no such thing.

1st ... it sets up conditions in which its favorites can create massive barriers to entry then through subsidies and kickbacks builds that snowball bigger and bigger.

2nd .. once a given industry pisses them off they crucify them in the media and dismantle the monopoly they helped to build in the first place. this makes the ignorant anti business crowd all warm and fuzzy.

Rinse & Repeat.


Your location says France. Take a look around you your economy is circling the drain. This is because of idiotic socialist policies enacted by your government.

The true justification for government is people are [censored] stupid.

[clowntable]

I am clearly talking about an ideal government and not any in existance if I want to make a comparison to an ideal AC state otherwise this is a pretty worthless discussion.

[ShakeZula06]

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I am clearly talking about an ideal government and not any in existance if I want to make a comparison to an ideal AC state otherwise this is a pretty worthless discussion.

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An ideal government seems awesome as well as an ideal AC world. Niether is worth talking about as niether is possible.

[clowntable]

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I am clearly talking about an ideal government and not any in existance if I want to make a comparison to an ideal AC state otherwise this is a pretty worthless discussion.

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An ideal government seems awesome as well as an ideal AC world. Niether is worth talking about as niether is possible.

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Still it doesn't make much sense to compare two theories on different levels of abstraction.
I'm also sad to hear that you lost hope :|

[jogger08152]

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I am clearly talking about an ideal government and not any in existance if I want to make a comparison to an ideal AC state otherwise this is a pretty worthless discussion.

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An ideal government seems awesome as well as an ideal AC world. Niether is worth talking about as niether is possible.

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Still it doesn't make much sense to compare two theories on different levels of abstraction.
I'm also sad to hear that you lost hope :|

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For the record, I think "ideal" government is attainable, at least with respect to its interaction with monopolies.

A government that trustbusts will be popular among its citizens; one that fosters monopolies or offers other sweetheart deals to business, particularly when it seems to be acting in the private interests of its elected officials by doing so, will not.

If you doubt this, mention the phrase "Dick Cheney loves Halliburton" at a political rally. The democrats will boo Cheney and the republicans will boo you for impugning their man.