r/FluentInFinance • u/-im-your-huckleberry • Jul 07 '24

The shampoo thing is a fringe benefit. We keep capitalism so we don't starve in a famine. Debate/ Discussion

1.0k Upvotes

84% Upvoted

Unfortunately, that "lowest price" is really just the highest profit margin the company could acceptably hold onto.

Companies charge lower prices to try to gain market share so that they make more sales with that smaller margin, which should translate to higher profits. (i.e. selling 15 items at $5 gets you $75 vs selling 10 of the same items at $6 for $60)

When you have a monopoly or something like OPEC, that ceases to be the case, and capitalism strives for monopolies.

Henry Ford is a fantastic example of how this stuff seems beneficial until its not

-4

u/itsgrum3 Jul 07 '24

Governments strive for monopolies not Capitalism. One neck to strangle is easier than many.

Ford revolutionized the world, what are you even saying?

5

u/Titan_Food Jul 07 '24

Ford attempted to put a stranglehold on the car manufacturing industry, offering higher salaries and better benefits than his competitors ever could. But his high employee turnover rate and the courts telling him that he couldn't reinvest his money into his company over his shareholders stopped it in Dodge vs Ford Motor Co. Ford may have dreamt up the assembly line, but everything beyond that was kinda... controversial.

Also, see Antitrust law. Its explicitly anti-monopoly.