Originally Posted by lostinacause

Sorry, I did not realize how term heavy that was. I will elaborate and simplify the language.



The first comment was just the assertion that according to economic theory in the worst possible case, one producer, the price that individuals face will go down as the cost per unit decrease. Most competition is not monopolistic. Even a company like Microsoft has competition. In an oligopolistic framework (2 or more competitors) the same general conclusions will hold even in the case of perfect collusion because it holds for a monopolists. This again is an assertion (and is exceedingly difficult to prove) but if result holds for the monopolist something is wrong if it does not hold for an oligopologist.

The next comment is that that because firms are larger and are using some of the recent advancements in economic theory they are able to price in a fashion charges a higher price to people with a higher willingness to pay for the good. At the same time they charge a lower price for those who have a lower willingness to pay. The price decreases due to free trade will be greater for those who are able to behave as though they have a low willingness to pay for the good in question. Now more then ever that the people who are smart about how they shop do incredibly well.



Many of the jobs that are being outsourced are labor intensive and as such are not very profitable. At the same time they are necessary and the economy cannot function without someone doing these jobs. If the right policies are put into place a country can export these labor-intensive jobs to other countries and replace them with tasks that are more productive. Naturally this would require policies that change the nature of the economy. The particular focus would have to be the development of human capital through training and education. The government, particularly the federal government, has failed to take such initiatives. Hopefully actions will be taken to do address this issue, but as with many things addressing the problem earlier would have been more beneficial.