Going Places (1948) part 3 - Bad business deal goes wrong, profits fall.

Fudsy and Sam Sudso control 70% of the soap market and decide to fix prices to increase profits. However, a competitor offers a cheaper alternative, leading to losses for Fudsy and Sam. This scenario illustrates how competition usually benefits consumers, and when it fails, government intervention prevents monopolistic practices.

What is the dual nature of the profit motive as discussed in the video?

• It can lead to both innovation and market saturation.

• It can result in both economic growth and environmental harm.

• It can bring out both positive and negative behaviors.

• It can cause both inflation and deflation.

What percentage of the country's soap sales do Fudsy and Sam Sudso control?

• 50%

• 80%

• 70%

• 60%

Why is the plan to fix prices considered problematic?

• It is unlikely to succeed.

• It requires too much investment.

• It is illegal and unethical.

• It is too complex to implement.

What happens when a competitor enters the market with a lower-priced soap?

• The competitor fails to attract customers.

• The government shuts down the competitor.

• Fudsy and Sam Sudso increase their prices.

• Fudsy and Sam Sudso's profits turn into losses.

What role does the government play when competition fails?

• It increases taxes on successful companies.

• It provides subsidies to struggling companies.

• It steps in to prevent monopolistic practices.

• It encourages companies to merge.