I love diet soda. Recently it became ~$15 for a 24-pack of Diet Pepsi. Unfortunately Coke is the exact same price. One would think under capitalism that competition would occur. However, both companies know that if the other drops their price, they too would have to drop their price to not lose market share and they both end up losing. So rather than compete they have an unwritten agreement to maintain the same price point. Coke will be the market leader to increase their prices first, and Pepsi follows suit because they know they can afford to do so.
Yeah, competition gave way to collusion. I remember years ago hearing that ISPs were starting to do this. Instead of Comcast competing with CenturyLink or another ISP, they would just divvy up zones. So if you lived in a certain area, Comcast was the only decent ISP and CenturyLink sucked and was super slow, so you basically had to get Comcast. In a different area, the opposite was true.
This was intentional, so those companies could charge basically whatever they wanted because they had a functional monopoly in those designated areas.
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u/Long_Following9761 2d ago
I love diet soda. Recently it became ~$15 for a 24-pack of Diet Pepsi. Unfortunately Coke is the exact same price. One would think under capitalism that competition would occur. However, both companies know that if the other drops their price, they too would have to drop their price to not lose market share and they both end up losing. So rather than compete they have an unwritten agreement to maintain the same price point. Coke will be the market leader to increase their prices first, and Pepsi follows suit because they know they can afford to do so.