NorthernHicks: Sadly is what WILL happens, because free market has nothing that intrinsecally make it "bad" and the competitive advantage makes it "good". From a purely logical standpoint, is the rational thing to do: unite to be strong instead of compete and be weak.
Just in case you donÂ´t notice, am playing devilÂ´s advocate here.
Pricing is not an either or proposition. There is a price point that maximizes profit - lower the price, and you lose money in lower margins, raise the price, and you lose money in lost sales. For luxury goods, that price point can be quite high. But for commodities, it is also the price point that your competition is trying to find. So it is not "collusion" for competitors to have nearly the same price. Competition is more along the lines of attempting to lower costs (sometimes at the expense of quality), or offer some unique feature.
At a previous employment I felt like we were bugged because so many comics reflected what had happened earlier in that very month.
I think my current employment is bugged too, because this is exactly what's happening here. Sales is constantly driving down our prices (also forcing us to do whatever we can to reduce costs), and I feel like I'm the only person who foresees an eventual zero profit margin.