When you price good below your production costs and have most of the market, then that is considered anticompetitive, monopolist behavior and is illegal in many places.
This is because if a large enough company does this, they can lower their prices locally to below cost whenever a new company enters a local market and subsidize this with their other markets. This creates a stranglehold on the market that can allow a company to charge artificially high prices for sub-par services.
This isn't just theory there is a well established pattern here and that is why laws prohibit it in many places.
This is because if a large enough company does this, they can lower their prices locally to below cost whenever a new company enters a local market and subsidize this with their other markets. This creates a stranglehold on the market that can allow a company to charge artificially high prices for sub-par services.
This isn't just theory there is a well established pattern here and that is why laws prohibit it in many places.