but if one firm in a PCM decreases their price then all other firms will follow as they will be losing market share if they dont decrease there price as consumers want the cheapest price
in a PCM there are: 1. many buyers and sellers, 2. al firms in the market must be selling identical products in order to compete, 3. there are no barriers to new firms entering the market.
so for example if one firm is to increase there price all other firms will keep the prices the same and not follow but the firm which has increased their price will lose market share as consumers will go to the competitors who have cheaper prices
@danikoz "...if one firm is to increase there price... all other firms will keep the prices the same... but the firm which has increased their price will lose market share... as consumers will go to the competitors who have cheaper prices"
Good explanation, competitive markets don't allow firms to set prices for goods and services; This is called Price Theory. Consider firms to be "price takers", meaning firms manage their level of production in response to market prices.
Freely entering the market is not at all the same as entering on the same footing.
To imply that the two are connected is misleading at best. This is a really critical distinction because if we say that I have a right to enter on equal grounds, then either I must be given resources that I do not possess at the outset, or those who precede me must be undermined upon my entry, and that is not a free market.
Isn't a huge portion of the US's capitalist energy spent in trying to make sure that none of the conditions are true? (at least 1 thru 5). They seek monopolies, build barriers to entry, the obfuscate knowledge, or just lie, and differentiate products by irrelevancies. Even 6 & 7 if they can - like big pharma making Medicare a non-utility maximizing customer?
Isn't US capitalism the antithesis of Free Markets?
It's an empire & it's not confined to North America. They have control of energy, resources, manufacture and distribution by large multinational corporations to the point that they control the food, water and heat to billions and they can put the jack boot to the throat of anyone that gets in the way
All governments are based either on force or deception. There are a few middle eastern countries that haven't completely bought in to all the lies, they have their own lies. It keeps us distracted
Isn't it the absence of Free Markets (competition) the element that allows corporations to turn into "empires". The US constitution provides no protection against corporations (Jefferson wanted "No monopolies in commerce" in the constitution but didn't get it).
Once corporations were able to use their power to influence (control?) government, then government becomes another source of profit, and power, and, in particular, to power to avoid competition - to avoid having free markets.
but if one firm in a PCM decreases their price then all other firms will follow as they will be losing market share if they dont decrease there price as consumers want the cheapest price
danikoz 8 months ago
in a PCM there are: 1. many buyers and sellers, 2. al firms in the market must be selling identical products in order to compete, 3. there are no barriers to new firms entering the market.
so for example if one firm is to increase there price all other firms will keep the prices the same and not follow but the firm which has increased their price will lose market share as consumers will go to the competitors who have cheaper prices
danikoz 8 months ago
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@danikoz "...if one firm is to increase there price... all other firms will keep the prices the same... but the firm which has increased their price will lose market share... as consumers will go to the competitors who have cheaper prices"
Good explanation, competitive markets don't allow firms to set prices for goods and services; This is called Price Theory. Consider firms to be "price takers", meaning firms manage their level of production in response to market prices.
DOHC2L 2 months ago
wmiller24 why do you keep injecting fairness in a discussion on freedom? Liberty is not equity in the sense that you are implying.
The barriers to a free market are not competitive barriers but legislative barriers.
Forgive my ignorance, but who came up with these seven points?
032125 2 years ago
@032125 This isn't a video on "liberty", this is a video on perfectly competitive markets.
See the John Locke video for "liberty".
PencilsAreAwesome 2 years ago
Freely entering the market is not at all the same as entering on the same footing.
To imply that the two are connected is misleading at best. This is a really critical distinction because if we say that I have a right to enter on equal grounds, then either I must be given resources that I do not possess at the outset, or those who precede me must be undermined upon my entry, and that is not a free market.
032125 2 years ago
Isn't a huge portion of the US's capitalist energy spent in trying to make sure that none of the conditions are true? (at least 1 thru 5). They seek monopolies, build barriers to entry, the obfuscate knowledge, or just lie, and differentiate products by irrelevancies. Even 6 & 7 if they can - like big pharma making Medicare a non-utility maximizing customer?
Isn't US capitalism the antithesis of Free Markets?
postorm 2 years ago
It's an empire & it's not confined to North America. They have control of energy, resources, manufacture and distribution by large multinational corporations to the point that they control the food, water and heat to billions and they can put the jack boot to the throat of anyone that gets in the way
All governments are based either on force or deception. There are a few middle eastern countries that haven't completely bought in to all the lies, they have their own lies. It keeps us distracted
Slavestorms 2 years ago
Isn't it the absence of Free Markets (competition) the element that allows corporations to turn into "empires". The US constitution provides no protection against corporations (Jefferson wanted "No monopolies in commerce" in the constitution but didn't get it).
Once corporations were able to use their power to influence (control?) government, then government becomes another source of profit, and power, and, in particular, to power to avoid competition - to avoid having free markets.
postorm 2 years ago
very helpful and easy to understand thank you
d2ncr 2 years ago
Thank you. Very well presented and it helped me a great deal...
mysticme27 3 years ago