[WileyC]

What the hell do you think he's going to do? He's going to drop his prices. That's why it is stupid for his competitor to drop his prices. If they get into a price war, they both lose. They would both be better off leaving prices where they are.

Good lord, that comment is ignorant. By that argument there would never be ANY price competition. And yet it happens ALL THE TIME. Therefore your argument is false.

Look at from the other side. Every business that lowers their price to match their lowered costs (i.e. there is NO LOSS to the business), gets a chance to increase market share. Simple, eh? If you don't believe in this, you basically don't believe in free markets or capitalism and don't really belong in a discussion of either.

[Your Nightmare]

Good lord, that comment is ignorant. By that argument there would never be ANY price competition. And yet it happens ALL THE TIME. Therefore your argument is false.

By your argument prices would continually be going down. And yet prices, in general, rise ALL THE TIME. Therefore your argument is false. Pricing isn't a race to the bottom.