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beowulf

Price Regulating

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>Oh horror! Selling milk at a loss!

Got no problem with people selling stuff at any price they want to - provided it's not part of a price-fixing scheme to drive other companies out of business (which, unfortunately, happens with some regularity.) However it looks like that's not the case here.

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At least one Fresh Market shopper was outraged . . .“Should we do the same thing with bread? Should we do the same thing with soft drinks?
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Milk is one thing. But don't you touch my Diet Coke!

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>I don't think the Gov should have any role in the pricing of goods.

For the most part I agree. However, companies will sometimes collude to destroy other companies to maximize their own profit. Here's an example how this works:

A large mining company has large deposits of lithium in its mines. It competes with all the other mines around the world, and sells it for $50 a pound.

It does not like this competition, so it sells it at $10 a pound, even though it costs $30 a pound to mine. It takes a massive loss but is large enough to absorb the loss for a while. The other smaller companies cannot compete and so go bankrupt.

The large company then buys all the smaller mining companies. When it owns them all it raises the price to $100 a pound. It then makes a killing since it owns all the sources of lithium, and no one can compete with them.

This is why we have laws like the Sherman antitrust act.

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>Oh horror! Selling milk at a loss!

Got no problem with people selling stuff at any price they want to - provided it's not part of a price-fixing scheme to drive other companies out of business (which, unfortunately, happens with some regularity.) However it looks like that's not the case here.

I liked this comment:

===========
At least one Fresh Market shopper was outraged . . .“Should we do the same thing with bread? Should we do the same thing with soft drinks?
===========

Milk is one thing. But don't you touch my Diet Coke!



you mentioned it happens with some regularity. how often do you believe businesses get together to fix prices? i would say quite rarely. its hard enough to get your own employees to agree on things, i could not imagine the difficulty of calling my competition and trying to get them to agree to fix prices.

purposely setting prices on select items to drive your competition out of business i can agree probably happens with some regularity. two business owners or managers working together just doesnt seem realistic to me. Based on my experience anyway.
"The point is, I'm weird, but I never felt weird."
John Frusciante

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If I remember right, Standard Oil never raised prices and instead kept prices low to keep competitors at bay. I don't see how that would be a bad thing for consumers.

Quite often I prefer to ask questions so I have clear picture of what someone else thinks. It's not a good idea to just assume you understand their view point.

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>how often do you believe businesses get together to fix prices? i would say quite rarely.

VERY rarely nowadays. There are several laws against such anticompetitive activities.

> its hard enough to get your own employees to agree on things, i could not imagine
> the difficulty of calling my competition and trying to get them to agree to fix prices.

Agreed. And as I mentioned I do not think that is happening in this case.

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If I remember right, Standard Oil never raised prices and instead kept prices low to keep competitors at bay. I don't see how that would be a bad thing for consumers.

If I've heard correctly, Standard Oil was one of the trusts that Teddy Roosevelt left alone. He figured much the same himself.

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I don't think the Gov should have any role in the pricing of goods. If companies want to have price war then have at it. That tends to be a good thing for consumers.



I'm a libertarian. And these are good in the short run for consumers but in the long run they aren't so good because competition is eliminated. There is a lengthy history of companies putting others out of business by dropping the price so much that the company takes a short term hit but smaller companies cannot weather it and go out of business.

It happens all the time. Everywhere. in pretty much every industry.


My wife is hotter than your wife.

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Well, there was the bagged ice price-fixing case, the Dow Chemical polyurethane price-fixing case, the McKesson Medicaid case ....
The Department of Justice prosecutes dozens of price-fixing cases every year. Whether that amounts to "regularly" or "rarely" is up to you.
You don't have to outrun the bear.

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I don't think that is a good reason for the Government to get involved and basically do price regulation.



As libertarian as I am, I do. A free market is not "free" if entry into the market - and maintenance of market presence - is not available. We libertarians KNOW that free markets are ruled by competition in the long term.

It's why we dislike unions. They are not bound by anti-competition rules. While businesses must operate under rules, unions are exempt from them. ANti-competitive behavior is bad. Either apply the Sherman Anti-Trust Act to all or get rid of it.

It is a choice between evils.


My wife is hotter than your wife.

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Well, there was the bagged ice price-fixing case, the Dow Chemical polyurethane price-fixing case, the McKesson Medicaid case ....
The Department of Justice prosecutes dozens of price-fixing cases every year. Whether that amounts to "regularly" or "rarely" is up to you.



i understand its relative, that is why i asked him for clarity. IMO it is rare. there are billions and billions of transaction a day in this country. I would be willing to bet very few are part of a scheme involving competing sellers or buyers. also, IMO, not because of the law but because of human nature. competitors do not normally cooperate with each other. its not natural
"The point is, I'm weird, but I never felt weird."
John Frusciante

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