There is another reason why companies lower cost, and it's because of competition. We have seen company after company in all sorts of sectors lose revenues because of competition, so your theory that they only lower costs to increase volume doesn't hold water.

Please read my post again, lowering of internal costs does not lower external costs unless doing so increases profit due to volume changes.

You're arguing that a company with competition may choose to lower its price whether or not internal costs have lowered (or not). That's a different question entirely.

If lower internal costs are achieved there is more flexibility to competitively price your product, i.e. reduce prices.

This is taken into account with the volume change point.

internal cost sets the lowest bar possible without a profit, it does not set what the price will be in the face of competition because companies charge as much as they can to maximize profit. That maximization either comes in the form of per-unit profit or volume profit.

Right. Companies are compelled to competitively price their product. They still seek profit, but are not at will to price whatever they want. I'm not sure then how you arrive at the conclusion that "the free market trumpeteers are wrong."

I don't think anyone disagrees that companies must price their product competitively and that they seek profit, those are uncontroversial facts.

I'm going to repeat myself here.

read the post again.

It's there, that you cannot see it is neither a damnation of the point, nor a refutation of it. If you cannot find a way to respond to the actual point being made there is no discussion to be had here.

Your entire premise is that "free market trumpeters" are wrong because we don't have a free market.

And as absurd as that sounds, you are right. I've heard more times than I can count from Libertarian ideologues that we could totally avoid these problems by just leaving the market alone.

So many people in the US stubbornly believe that a totally unregulated market would be a totally competitive one.

Back over here in reality, we see corporations taking every opportunity they have to be anti-competitive, and no amount of deregulation would change their motives.

The liberation we need is not for the market itself (as a whole), but for any new marketers who wish to compete against the giant incumbents that regulate them out of business. And the only option I'm aware of with enough leverage to intervene is government.