RE: Do Not Buy Into Inflationism
You are viewing a single comment's thread:
then look for technology to really kick into overdrive as high prices pull in a lot of new innovators.
This is actually one of the reasons I teach my students to not be overly concerned about monopolists.
Two important things to keep in mind with respect to 'monopoly power' over a specific line of goods or services:
- A monopolist can never charge more for a good or service than the value the consumer places on that good or service. If the monopolist were to try to charge a higher price, the consumer would simply walk away and either do without or purchase a substitute.
- Whenever a monopolist focuses primarily on maximizing prices (i.e. maximizing their producer surplus), they are inviting the kind of entrepreneurship and innovation @taskmaster4450le mentioned in this post. At some point, entrepreneurs will innovate to the point that the original monopolist finds himself or herself with a monopoly on a good or service that no one wants, because high prices drove innovation and that innovation ultimately produced a better product at a cheaper price.
NOTE: Cheaper prices (and higher quality) over time due to constant innovation are, of course, a big part of the long-term deflationary trend @taskmaster4450le is pointing out in this post.
0
0
0.000
Monopolies are getting hit harder and quicker than ever before. What tends to happen is they hang onto an industry yet the industry, overall, changes. So while we can look at companies like Blockbuster and Kodak dominating their realms right up to the end, other distribution and technology cases made their realm obsolete.
Look for this in the healthcare industry as we see major innovation over the next decade. This is a field heavily protected by the institutions with the backing of the government. Yet, the technological progress will go around this, leaving many of them holding the bag.
Posted Using LeoFinance Beta