Posted on 06/28/2007 1:28:18 PM PDT by Lurking Libertarian
Hmmmm..... opens the doors to price gouging, monopolies...
Years ago my dad pointed out to me that it is illegal to
1) charge more than your competitors - that’s price gouging
2) charge the same as your competitors - that’s price fixing
3) charge less than your competitors - that’s dumping
My eyes say yes yes yes, but my wallet says no no no. We shall see how this one shakes out.
Opens the door to better service and less free-riding.
Besides, this doesn’t really alter the world in which we live, anyhow: just makes it simpler. The rules were already in place to allow a manufacturer to set a minimum price, except it just had to jump through a bunch of hoops.
All this says is the Plaintiff must now prove his case that the agreements are anti-competitive rather than having the law say the behavior is “per se” anti-competitive and eliminating the need to prove this essential factual element of any Sherman Act case.
“The decision was the latest in a string of opinions this term to overturn Supreme Court precedents.”
GOOD. Lets hope they overturn many more. After all, Dread Scott was “established precedent” at one time as well.
What??
It's true that, once you have a monopoly, you have direct control over prices in that, you can increase output of your product, thus lowering demand and decreasing price.
But, if you've got total control, why would you do that?
In actual practice, monopolies typically drive prices up.
One reason my utility bills are so high.
That's true, but the level at which they keep the price is certainly not as low as it would be with competition. It's simply low enough to discourage the startup costs of a competitor.
I can't think of a single example of a monopoly that drove prices up and even if I could it would be a very rare exception to the rule.
Microsoft.
You'll see prices for future versions of Windows plummet as other operating systems become more and more competitive.
Seems to me that, for years, I've seen clothes with slashed labels on sales racks. We, the American consumers, weren't supposed to "know" that the products of the more high-falutin' clothing companies were being sold in bargain basements, but we could buy them at bargain prices.
Bump for later read.
Based on the prices paid for versions of Windows over the years.
Had there been a truly competitive product over the last 20 years, I have little doubt that the average price of an iteration of Windows would be considerably less.
However, at this point, I'd be trying to prove a negative. I'm betting if we have this conversation five years from now, I'd be able to better prove my point. We're almost at the tail-end of a monopoly in operating systems.
Another example is the airline industry. Here's an example of a study of the price effects of competition vs. monopoly in that industry.
There are, of course, other factors than just "Monopoly = High Prices, Competition = Low Prices", but as a general rule, it follows that two or more entities offering competitive products will be forced to lower their prices.
They say God allowed the Jews to divorce because they were a stiff-necked lot. This ruling simply acknowledges what has been defacto policy for a good long time. I have experienced the defacto law regarding internet sales time and again. I don’t know that it’s good, but it is what it is.
I have two questions:
1. What is price gouging?
2. How is this related to monopolizing the market?
Jasun, on the other hand, is talking about contested monopoly. The latter was analyzed only in 1970s, if I remember correctly.
How do you know that? Were you in a competitive market before and observed prices going up after it was monopolized?
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