Does Competition Lower Consumer Costs?

Statement: Increased competition brings down consumer costs

The statement is not necessarily true. What is true is that competition between suppliers will always apply downward pressure on consumer cost. In complete isolation, the statement is completely correct. However, in real life things are never in isolation. There are also upward pressures on consumer cost that need to be taken into account.

More generally, you would use the elasticity of demand for the particular good you’re examining to find how much that increased competition between suppliers reduces the consumer cost. You compare that number with the increases in consumer cost caused as a side effect by whatever increased the competition. Find the difference between the values to get the net change. Whether or not increased competition brings down net costs is extremely dependent on the exact circumstances.

Fee Structure

Rate Assets Under Management
1.44% Below $125,000
1.00% Between $125,000 and $750,000
.85% Between $750,000 and $1,250,000
.80% Between $1,250,000 and $1,750,000
.75% Between $1,750,000 and $2,500,000
.70% Between $2,500,000 and $3,250,000
.65% Between $3,250,000 and $4,250,000
.60% Above $4,250,000

A single rate is applied to the entire account. So a person with a $750,000.01 account pays less than a person with a $750,000 account. I will waive personal tax return fees for accounts over $1 million. For accounts that are above $5,250,000, we’ll need to discuss a custom rate.

As I’m writing these to help my readers, I would be very appreciative of any input in regards to what I should write next. If you want me to write about a particular topic, please contact me. Please contact me if you would like to submit a post to my blog.

If anything that I mentioned above interests you, please consider downloading my free e-book. The book contains my thoughts on investment management and some information that I think everyone should know. You can also download it below.

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Questions for the comments

Did my explanation make sense? Do you agree or disagree with what I said?

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