Each firm knows that its profits are the result of its ability to get and keep customers.
Each firm knows that its profits are the result of its ability to get and keep customers. For example, if a firm has 10,000 customers, there will be 10,000 ways to sell the product. In this example, each firm knows this.
The problem is that we don’t know how many ways there are to sell things. In a competitive industry there are no real competition, so there are no real ways to get customers. So how do we get customers in a competitive industry? By simply being better at selling things.
It seems that this is one of those things where you have to be able to talk about the product. If you just say, “We sell your house,” you’d be laughed out of the room. But in an oligopoly you can mention that you have 100,000 houses in your portfolio. It’s a way of showing that you can get customers by selling their houses.
I have to admit, I get a little tired of seeing this in my own blog. I don’t think I need to spell out, “We sell your house,” at the end of every sentence. I think it is one of those things that is meant to convey that you are selling your house, but you are not selling your house to anyone. If you are selling your house to someone you are selling it to them for the long haul.
That’s great and all, but the problem is that it just reinforces the idea that you are selling your house, and not to anyone. If you are selling your house to somebody who is not a customer and not willing to pay you what you say you are paying, then that is a different thing you are selling. The problem is you are not selling your house to anybody. You are selling your house to somebody.
This isn’t to say that there are no exceptions to this rule. There are people who buy or build their own homes who don’t really care about the sale of their house. What they do care about is who is living in it. The same holds true for any other residential property. The only real-estate transaction that is really a sale is the one where someone buys a house for a few thousand bucks.
Most of the time the deal isn’t a sale, it’s simply the payment for a property. It’s when the seller gives the buyer a contract that is considered a sale. This is because the other party is paying a fair price. This is why the seller keeps the same name on the title deed.
In real estate the sellers are the buyers, and the buyers are the sellers. The seller names a price, and the buyers then agree to buy the property for that price. The seller then pays the buyers with a check, and now the buyers have the property in their hands. If the seller is out of the picture, then the transaction is simply a payment of cash.
The same thing happens when it comes to monopolies. Each firm knows that its profits are equal to its costs. There is no profit in the transaction, and there is no profit in not being able to compete.
