Discriminating Monopoly

  

Monopolies have the power. All of it.

Since monopolies don’t face any market competition by definition, they are price setters instead of price takers. For instance, if there was only one company making smartphones and nobody else could, they could make the price of smartphones anything they wanted. Scary.

A discriminating monopoly is a monopoly that tries to squeeze the maximum price people are willing to pay, charging different prices for different groups. The classic example of a discriminating monopoly IRL is airlines. You know how tickets are initially priced low, and then if you wait too long, they’re super-expensive? Yep, that’s discriminating right there, on that specific good.

The price is low in the beginning to get buyers to swoop in. Once enough bargain hunters have gotten their seats, the airline will raise the price for those last-minute people. If there are still some empty seats, they’ll lower the price again to get bargain hunters who are willing to hop on a flight that they maybe weren’t expecting to.

That’s a time-example of price discrimination, but there are also geographic examples, like stores in wealthy neighborhoods that charge more for the same stuff sold in the poorer neighborhoods. In order for monopolies to discriminate on price, they have to find some way to cater to the different groups, whether using time, geography, or...something from the Twilight Zone…

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monopoly that great nineteen Our game control a whole side

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of the board build houses then hotels on it and

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odds of a competitor landing there to suffer huge fees

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are wickedly Hi You take that cash buy more properties

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build more houses and hotels and eventually rule the world

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nothing and stay at home with a key phrase Here

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is mono and it's not related to the you know

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team kissing disease mano as in one one owner One

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center of price is the only game in town will

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monopolies No no not at all However regulators got all

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willy on them for using that monopoly leverage to then

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restrict business from peripheral competitors And that's a naughty That's

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a no no The key issue revolves around what governments

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defined as quote fair competition unquote like what is fair

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here Well if a gas station uses its leverage as

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a place where SUVs go to drink up is it

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fair for that station to sell a pack of gum

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for five bucks Totally But what if the station forced

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you to buy that stick of gum with every gallon

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of gas Do you have alternatives What if the owner

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of that station owned all of the stations within five

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hundred miles and then forced everyone who filled up toe

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Yeah probably not Well you could say that they have

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monopoly to there Gummi advantage But okay so that's Monopoly

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seller Ammen Ops Unni is one buyer Think a coal

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mine in a small town in West Virginia As a

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buyer of labour there simply isn't another employer anywhere remotely

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close I'm an optioning Well certainly a local one What

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about a public school district buying textbooks for its students

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Yeah pretty much of an option E Yes private schools

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by textbooks but they usually represent a small percentage of

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the public school volumes at least in most areas of

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the country And there's not a whole lot of demand

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for American textbooks in Russia right Amazon Well as faras

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books go Amazon probably is well they're responsible for some

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seventy percent of all books sold in the country and

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well over half around the world And that number's going

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up not down So that vaunted man ops any status

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is probably coming The result While Amazon can buy it

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pretty much any price they want to buy at just

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up until the cellar of that book decides it's not

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even worth the effort to go pack up the book

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in a box and ship it to him or Teo

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Get them the log in codes you know to download

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it from their servers That isthe Sellers will sell to

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a monopoly money until the marginal value at our contribution

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of that last book is zero Then they'll stop and

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product they consume That producer stopped producing it Well then

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the need they lived to serve isn't filled and they

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