NoxicRox t1_iuazvar wrote
Reply to comment by squeevey in Amazon may have to turn to SpaceX for help launching its Starlink rival service by Soupjoe5
This would more than likely make StarLink more affordable. More competition in a monopolistic firm, will help lower the economic profit, and as a result, lowers the price for consumers.
If a perfectly legal world (lol), Amazon and StarLink cannot collude on price, and because of this, when one lowers price because their profit margins are allowing them to, the other firm will react by lowering theirs accordingly and we get this balancing act until marginal profits equal 0. At this point, the consumers are getting the best deal.
That’s where we are headed if StarLink gets some competition.
Maneatsdog t1_iubbifb wrote
Which investor is willing to sink $1B for 0 marginal profits? No one is going to do all that work launching satellites to make your internet cheaper.
Service providers compete by differentiating their offerings, not their prices. Consumers are often willing to pay a lot more for a service provider that meets their demands. Bezos earned his AWS money doing exactly that - there are plenty competitors that may be 10x cheaper.
NoxicRox t1_iubjv4k wrote
Through an investors standpoint, the business is actually operating at its efficiency point when marginal profit is equal to $0.
When marginal profit is equal to $0, marginal revenue equals marginal costs, which would indicate the production point where profits would be maximized.
As an investor, you don’t want to see money that’s stagnant, you want the firms you invested into to maximize profits at any given point in time.
What you said completely goes against microeconomic principles. With that said, I’m convinced you have no idea what you’re talking about lol
Maneatsdog t1_iudtogd wrote
Today I learned that marginal profit is not what i thought it was! Thanks for your explanation
littlebitsofspider t1_iubu3w8 wrote
>That’s where we are headed if StarLink gets some competition.
If, perhaps, greed suddenly ceased to exist.
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