There are no simple logic errors. Your explanation is a joke based on the world view good companies exist in a vacuum and are incapable of influencing other companies.
Look into an industry like smelting for ore. There usually aren’t monopolies but the few that exist are so far apart that the switching costs to a competitor are really painful. This gives them the ability to influence decisions.
Here’s another one. A mine needs nash and the only reasonable price is when buying it from a supplier only 300 miles away with a direct rail connection vs trucking from 800 miles away. Buying from the 800 mile supplier causes shipping costs so large the mine might lose profitability.
This does not make the nash supplier a monopoly despite its incredibly strong negotiating position that it can use to get the mine to agree to long-term volume lock-ins, exclusivity agreements, etc.
Again, by your definition, tons of businesses would be considered monopolies that no economist would because it makes the meaning useless.
Interesting examples. Monopolies are usually considered to exist with respect to a particular market. It doesn’t have to be a global monopoly to count, particularly with respect to a particular regulating authority. For example Amazon’s share of the Chinese book market is of no concern to the US regulators. But similarly Amazon might have a monopoly in certain types of books and not others.
In your example of the mine, a regulator would have to consider the degree to which the mine and it’s supplier are or aren’t integrated into the overall market. It’s not a one size fits all question. The free marketeer answer is to this their hands up in the face of such complexity and say let the market decide. But then it’s back to cartels and sub standard goods. The balanced approach is messy though and there are difficult edge cases, but someone has to bite the bullet, IMHO.
But what is a regulator to do in that situation? Dictate prices for the seller to keep the mine open? Who does that really help if it’s preventing the nash dealer from selling it someone who is willing to pay more for it? This suddenly puts the regulator in position of keeping the mine open under the auspices of a central planning committee, which is not an easy position to defend.
Both the mine and the nash seller are operating in global markets. But this is an industry (like most heavy industry) where location and transportation connectivity can make or break a deal due to the volumes being talked about.
Oh absolutely, the specifics will matter, that’s why I say it’s not one size fits all. By itself charging what the market will bear can’t be enough, and the rules have to be clear so rulings aren’t arbitrary and participants can reasonably avoid infringement.
