The comment
cmn.jcs mentioned is incorrect.
All of your arguments suggest that the perfect price is the cost of production plus a reasonable profit. Can you give me an example of any (unregulated) business that prices this way?In fact the right price, in a free market, is the price that the customer is willing to pay. Too high, and you spill traffic. Too low and you lose opportunity (and risk the wrath of your shareholders). The end price may not be 'fair' but so what.Nice work, but purely academic. No relation to the real world.
On of my best friends works for a food company (think salad dressing). When the production price went down (one of the ingredients got cheaper) they passed the savings to the customer, the difference did NOT go towards dividends. It
does happen.
The idea of a completely free market is as asinine as the idea of a completely regulated one. It's very clear though that monopolies (with few exceptions, such as natural monopolies) are almost never good for the consumer, which is why so many countries have anti-trust laws.