*It called "profit". Go look it up, Mr. Socialist. There is no such thing as too much profit.*
I don't want to say when there is "too much" profit or not but there are circumstances where the consumer pays premiums for market inefficiencies. Excessive profits are a sign that a particular has forces in that result is prices not being able to reach long term average cost. In a mature competitive markets, prices will trend towards long term average costs and the markets that look more like this are the ones the "free marketers" like to example.
Of course some markets don't look very much like this. In our Broadband example, very high barriers to entry and very high fixed costs work against competition. There are other reasons too like right of way rights, but these two biggies get the ball rolling. Because this, it must be realized that without some technical disruptions that changes this dynamic, these markets will naturally want to trend towards a monopolistic model rather than one of pure competition. Of course what we do with this from the consumer's point of view is where the arguments lies. With that said, my opinion is that these socialist vs. capitalist arguments are just a distraction from realizing the economic forces at play.
Techdirt has not posted any stories submitted by sorry dog.
Re: Re: Re: Re: Re: Open Access FTW
I don't want to say when there is "too much" profit or not but there are circumstances where the consumer pays premiums for market inefficiencies. Excessive profits are a sign that a particular has forces in that result is prices not being able to reach long term average cost. In a mature competitive markets, prices will trend towards long term average costs and the markets that look more like this are the ones the "free marketers" like to example.
Of course some markets don't look very much like this. In our Broadband example, very high barriers to entry and very high fixed costs work against competition. There are other reasons too like right of way rights, but these two biggies get the ball rolling. Because this, it must be realized that without some technical disruptions that changes this dynamic, these markets will naturally want to trend towards a monopolistic model rather than one of pure competition. Of course what we do with this from the consumer's point of view is where the arguments lies.
With that said, my opinion is that these socialist vs. capitalist arguments are just a distraction from realizing the economic forces at play.
Techdirt has not posted any stories submitted by sorry dog.
Submit a story now.