alt Hacker NewsYou don’t lower your prices on the off chance a competitor might enter the market in the future. You wait until they have invested capital but before they start making profits and are at their most vulnerable.
You don’t lower your prices on the off chance a competitor might enter the market in the future. You wait until they have invested capital but before they start making profits and are at their most vulnerable.
I don't think that would work. They wouldn't demolish the competitor's factory when it goes bankrupt. Instead the factory, being an asset, gets sold for cheap, and another company gets a shot at competing while having much lower debts. This process could repeat a few times until the debt is low enough to profitability compete.
So if that's the expected outcome, it might be better to prevent competitors from building factories in the first place.