zlacker

> Regardless, expanding margins is only attractive up to a certain point. The higher your margins, the more attractive your market becomes to would-be competitors.

This does not make sense to me. While a higher profit margin is a signal to others that they can earn money by selling equivalent goods and services at lower prices, it is not inevitable that they will be able to. And even if they are, it behooves a seller to take advantage of the higher margins while they can.

Earning less money now in the hopes of competitors being dissuaded from entering the market seems like a poor strategy.

>>lotsof+(OP)
The premise wasn't that there weren't competitors already, I don't think. With most things the price is (usually) floored by the cost of production, ceilinged by the value it provides people, and then competition is what moves it from the latter to closer to the former.