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by bluGill 2239 days ago
I agree, but what does that have to do with Walmart providing some class at a loss?
1 comments

It's not at a loss, it's just at a rate they couldn't support if it were there only rate.

As a thought experiment, suppose there are a few local zillionaires start making "platinum" orders to local markets each day, with a $1M delivery charge. Will the markets stop accepting otherwise-profitable peon orders? No. That part is easy. But what will happen to the price of peon orders as the markets compete? They can afford to lower those prices a bit, since their fixed costs are spread across all customers, and the zillionaires are already paying the lion's share.

If you doubt this, imagine you run one of the markets and your competitor drops the price of his peon orders by five percent. Are you going to allow the competitor to take all of your business, forgoing the profit you'd otherwise earn?