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Therefore, brand new monopolist might be able to improve the production will set you back of its competitor from application of the newest ECPR
As the ECPR has been advised in order to ban entryway regarding the complementary a great field because of the inefficient entrants, it can be used so you’re able to prohibit or marginalize equally efficient otherwise more efficient rivals when there are broadening yields so you’re able to measure. The latest bottleneck monopolist may use the brand new ECPR to determine highest interconnection or availability charge you to result in a regulation of the scale from operation of the competition from the subservient sector. Given broadening returns to help you scale, the newest opponent up coming operates on top end of the average pricing contour. That it leads to an aggressive downside towards the competitor, as well as in highest charges for finally attributes. Individuals are deprived off straight down pricing who enjoys lead from race if ECPR were not used, together with off competitive alternatives. read more