James Leroy Wilson's blog

Tuesday, November 09, 2010

The Partial Observer - Consumer "Greed"

Check out my latest at the Partial Observer: Consumer "Greed"

The widgets at Mom&Pop sell for $10. WilShop starts selling widgets at $5. WilShop is actually losing money on each sale. But soon, most of Mom&Pop's customers switch to WilShop. Mom&Pop goes out of business. WilShop then raises the price of their widgets to $15. It might seem, then, that Mom&Pop could re-enter the widget market again, but its owners know better. If they re-open their store, WilShop will just lower their widget prices again.

Mom&Pop's profits had gone back into the community, as its owners lived in the town, shopped in the town, supported charities and community events in the town, and paid taxes to the town. WilShop's profits go to corporate headquarters in a distant state.

Who is to blame for Mom&Pop going out of business?

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