Coronavirus oil panic will help prove predatory pricing doesn’t work

Published March 9, 2020 9:23pm ET



One thing the coronavirus pandemic is going to prove to us is that predatory pricing doesn’t work. This shouldn’t be a surprise to anyone, as economists have been insisting for decades that it doesn’t. Despite that, we have incessant calls from those on the Left demanding that we’ve got to break up the large companies — these days, it’s Facebook, Amazon, and Google, but it’s always happened to whatever business is most dominant.

The claim is that a company with market power will lower prices to drive everyone else out of business and thereby create a monopoly. At which point, it can raise prices and rook us all royally. This is bad, so we must break up any company with market power.

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