big bussinesses and capitalism

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There are very few monopolies. There are big companies though, and what they can do is take a larger portion of market share, have much more of their advertising seen, and have a much bigger chance of succeeding and moving towards being monopolies as the competition is made bankrupt from loss of sales, or bought out.

An example of what may happen when you have a monopoly is shown by how Intel and Nvidia responded to AMD(ATI)'s inability to produce competing products. Both Intel and Nvidia no longer had any incentive to release better, newer products, or to reduce their prices. Only when AMD(ATI) started to release a better product did they reduce their prices to remain competitive, and release newer products. As it stands the competition is still not particularly strong, so Intel and Nvidia can afford to delay releases.

Could you provide an example of a "monopoly" in the free market that has done this, matsuiny (the monopoly stifling innovation, and if there is less competition, why is it necessarily bad)? Also, it is important to remember direct competitors are not the only competitors. Pepsi still has to compete with Best Buy for your money so to speak (since, in the short run, your income is probably fixed, and you can only spend it on so many things). Also, potential competition would prevent a monopolist from charging too much to consumers or becoming to stagnant (since potential competition can easily become real competition), and the only real way to prevent potential competition from becoming real competition is through government interference.

If monopolies are truly bad, then I challenge you to provide an example of a monopoly that reduced production and increased price (again without government support of it).

how about apple with their Ipod they interfere with competition fom other companies by making most of their songs be encodded with DRM and to buy a song that does not have DRM people had to pay extra.

How does having bestbuy as competition change any of this? they are selling to completely diffrent products

Terrible example. There is plenty of competition in the MP3 market. Try again.

I menat the mp3 player

Potential competition has no chance in a market flooded by a much bigger competitor's advertising. Advertising beats word of mouth hands down, and the large company's advertising will drown out whatever the competition produces, as they simply won't be able to afford as much.

I'm pretty sure that's what I was referring to. The iPod isn't the only MP3 player available.

there are no other Mp3 players I have heard of that can store 60 gigs or more of music

They exist. In any case, most people don't really need/want 60GB of music. If the iPod was the only product of such quality, certainly Apple can be said to have earned its market share by better serving the interests of consumers, right?

Your example fails, badly. Find a better one or concede the argument.

I think the CPU market example I used is pretty convincing.

The only competition to Intel's CPU business is the newly merged and much much smaller AMD/ATI (the same as for Graphics cards AMD/ATI is the only real competition to NVidia). If you look at the news posts/forums on sites like Tomshardware and Anandtech, then there's a lot of information about how the market was affected by the loss of competition after AMD/ATI's merger made them a less effective competitor (the management reshuffle left them reeling and unable to act quickly while their competitors produced better products). In particular you can folow the period of inactivity in producing new competing products, and price drops to counter competing products. Only when the 2 companies are competitive are there frequent releases of new technology and price drops, otherwise Intel can sit on their prototypes, and charge what they want for CPUs that have no competition in the same performance bracket.

To support the argument that a monopoly stifles it's competitors ability to majke a profit, Intel could afford to reduce the costs of it's CPUs far more than AMD, who being a smaller company have higher manufacturing costs (they have to rent a lot of their fabrication plants from other chip makers, instead of having their own).

A CPU from AMD of the same performance as Intel's offering would therefore cost more to produce, AMD had to charge less than Intel to be able to sell it's CPUs, so made less profit on each one sold.

Adam smith who is considered the father of economics was agianst monopolies

http://www.jstor.org/pss/1882577

Monopoly originally referred to a state grant that gave power of a particular market legally to one entity, thus disrupting the market process that defines true capitalism. Those arguing against your view of monopolies have already specified that you should use examples of monopolies that are not state-supported.

Oh, true, but Schumpeter later argued that they weren't so bad with an example of an aluminum company. Neo-classical theory would suggest that monopolies, other than natural monopolies, were inefficient, but neo-classical theory also does not necessarily know how to analyze how much monopoly a given industry should necessarily have, which was seen in the fact that brilliant economists were on both sides of the issue. And it would tend to argue that companies too much larger than efficient will suffer from problems related to that.

well if you want an idea of how the US is doing under a mainly capitialist economy

here you go

http://www.nytimes.com/2008/03/14/busin ... nd&emc=rss

I have realized that my problem is with big business dominating the competition without people being aware of the other competition, so I will change this thread to big business and capitalism.