rp0x
11-11-2007, 04:34 PM
In most cases, the market is in control instead of it's participants. But, not in the case of a monopoly or oligopoly.
Case in point. The hold on oil by OPEC.
OPEC can pretty much control the price of oil. They can drive up the price of oil to $100. Well, the free market steps in and entreupeners invest in alternate energy. As soon as they have invested a lot of money, they can bring down the price of oil to $20 and drive all of them out of business. Rinse and repeat. Do that a few times, and entreupeners will stay away.
(NOTE: I am not talking about the market conditions now, the devaluation of dollar, peak oil etc. This is just a general example)
So, what does free market economists suggest in such a scenario ? Just let the single individual do whatever he wants ?
Case in point. The hold on oil by OPEC.
OPEC can pretty much control the price of oil. They can drive up the price of oil to $100. Well, the free market steps in and entreupeners invest in alternate energy. As soon as they have invested a lot of money, they can bring down the price of oil to $20 and drive all of them out of business. Rinse and repeat. Do that a few times, and entreupeners will stay away.
(NOTE: I am not talking about the market conditions now, the devaluation of dollar, peak oil etc. This is just a general example)
So, what does free market economists suggest in such a scenario ? Just let the single individual do whatever he wants ?