The Monopolist's Pricing Dilemma

When an industry leader raises prices due to rising costs, it automatically creates an entry opportunity for competitors. The larger the price increase, the more pronounced the cost advantage of rivals becomes, potentially eroding the leader's market share. This is the inherent contradiction of monopoly power: the more absolute the pricing control, the more likely it triggers the emergence of alternative solutions.

Read the daily articles behind this idea on the Chinese edition.