>>1733064>Doesn't know the difference between monopoly and substitutes.Why am I not suprised.
>>1733065No, because it's doing a bad job with the position given. Say I give you an exclusive license to sell cocaine in your city. You're going to make a profit. Doesn't matter if you know nothing about cocaine, don't understand your customers, have no idea about marketing or your suppliers and mismanage your assets. You're the only guy who can sell it legally you'd have to fuck up real bad to not somehow turn a profit.
But say I don't give that license to you, but to a guy who actually knows what he's doing. Who understands the market, knows the future demands, is willing to invest and optimizes the proces. In comparison to you he will be able to make far more profit than you did.
Both of you make a profit, but if I can give only operator a license for that area. We'd be losing money giving it to you, because another guy can do it better and the difference, that's opportunity cost.
You THINK the railroad company is doing a good job because it's making a profit, but it's a horrible company who has been mismanaging all their assets to what we as society could have retained if it was better directed.
