I will be the first to admit, I have very little experience when it comes to economics, having taken a poorly taught class in high school and a very entertaining and well-taught class at Anoka-Ramsey when I was doing my generals.
One question that has been nagging on my mind for awhile is if competition is no longer viable or is reaching the limits for what it does for business. You have Wal-mart who is hell-bent on offering the lowest prices on absolutely everything. Then other businesses need to lower their prices in turn to stay competetive, and often they don’t have the sheer purchasing power that Wal-mart does.
What happens next? The business loses profit margin, or they lose sales to Wal-mart. Either one of those means cutting costs from their bottom line, usually meaning employee benefits, cost-of-living increases, or going out of business completely. Then, you have displaced or under-compensated workers in an environment where jobs, especially well-paying jobs, are hard to come by. They can afford usually less, so they go where the prices are cheap: Wal-mart!
I’m using Wal-mart as an example, but competition has pushed the profit margins of businesses to mere slivers, and some lose out completely. We then lose a large deal of potential competitors, meaning the survival of the so-called fittest, who then move closer to having a monopoly over the situation.
It’s a vicious cycle that I don’t see ending soon.