Comments by "DailyBeatings" (@DailyBeatings) on "There's a problem with Chinese factory overcapacity: We can't find it." video.

  1. Manufacturers will produce until marginal revenue equals marginal cost. There's no overcapacity because manufacturers would not produce if marginal cost was greater than marginal revenue. Economics 101.
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  2.  @ZweiZwolf  No, because demand is a function of revenue. What you are describing is called dumping or predatory pricing and has nothing to do with overcapacity.
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  3.  @ZweiZwolf  Dumping is a violation of WTO rules and predatory pricing can be considered illegal in many jurisdictions if the entity or entities have market power, such as monopoly, duopoly, oligopoly, etc... or two or more entities collude to price fixing. In any case if the action is deemed legal it's still called predatory pricing.
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  4.  @ZweiZwolf  "In most general terms predatory pricing is defined in economic terms as a price reduction that is profitable only because of the added market power the predator gains from eliminating, disciplining or otherwise inhibiting the competitive conduct of a rival or potential rival." Predatory Pricing: Strategic Theory And Legal Policy, US Department of Justice Archives, Retrieved May 10 2024 This type of behavior described is not "hyper" or "extreme" competition, it's a textbook example of predatory pricing. This definition is the standard orthodoxy of economics that is taught in high schools and universities throughout the world. Claiming otherwise is rather silly and foolish.
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  5.  @ZweiZwolf  “Better to remain silent and be thought a fool than to speak out and remove all doubt.” - Abraham Lincoln
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  6.  @ZweiZwolf  Here's a simple test question straight out of an economics 101 class: The use of sharp, temporary price cuts as a form of _____________ would enable traditional US automakers to discourage new competition from smaller electric car manufacturers. a. Predatory pricing b. Natural monopoly c. Oligopoly competition d. Monopolistic completion Guess what the answer is? Like I said claiming otherwise is rather silly and foolish.
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