You really think companies in America with monoplies would lower prices just because their costs went down?
So, theoretically, there’s a point at which induced demand through lower prices can raise profits. Having a monopoly on an elastic good only benefits you when you’re onboarding new clients at an escalating pace. Private energy companies looking to increase energy consumption overall may well take an upfront haircut on the retail price in order to encourage more people to adopt hardware that consumes the commodity.
But - over the long term - sure, the incentive is to capture more revenue in pursuit of higher profit. And that means raising prices faster than inflation.
That said, a public investment, could be pursued as a loss-leader. Public money invested in publicly owned utilities raises the availability of low-cost energy for private consumption. This is spent in pursuit of higher overall economic growth.
We’ve got representatives attacking the postal service for not being highly profitable. We aren’t at square one of investing in the public good even when it pays in the long run.
Bullshit.
You really think companies in America with monoplies would lower prices just because their costs went down?
I wish I lived in an America like that…
in AmericaAnd you can almost cross out “with monopolies” too because there’s a lot of tacit price-fixing in industries where there is competition.
Oligopolies, monopolies. Potato tomato, potato tomato
So, theoretically, there’s a point at which induced demand through lower prices can raise profits. Having a monopoly on an elastic good only benefits you when you’re onboarding new clients at an escalating pace. Private energy companies looking to increase energy consumption overall may well take an upfront haircut on the retail price in order to encourage more people to adopt hardware that consumes the commodity.
But - over the long term - sure, the incentive is to capture more revenue in pursuit of higher profit. And that means raising prices faster than inflation.
That said, a public investment, could be pursued as a loss-leader. Public money invested in publicly owned utilities raises the availability of low-cost energy for private consumption. This is spent in pursuit of higher overall economic growth.
We’ve got representatives attacking the postal service for not being highly profitable. We aren’t at square one of investing in the public good even when it pays in the long run.
Not every area gets power serviced by a for-profit company. For those who don’t, my condolences.