To: Alberta's Child
If Airbus wins the market, and drives US competitors out of business, they are then the only game in town. A monopoly. They can then name their own price and recover, massively, their earlier losses. And since their governments are still committed to them, they can undersell and muscle out any new competition that may come along.
To: Cacophonous
If Airbus wins the market, and drives US competitors out of business, they are then the only game in town. A monopoly. They can then name their own price and recover, massively, their earlier losses. It is my understanding that this is a common fallacy in economics. Most economists will tell you that they can't think of a single case in which this kind of strategy has worked successfully. Companies that engage in this kind of predatory practice never make up for all the losses they incur.
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