That's a good test.
If you're an ammo producer and people have no choice but to buy your ammo, why wouldn't you want the current situation to continue? You can run your existing factory at full bore and make record profits. If you take all that extra money and invest in more factories you're just going to drive down the price and your margin per unit will decrease.
Well, if there's potential for competition then driving prices up (or even destabilising them) will incentivise competition. Whether in the form of other manufacturing companies springing up, or reloading becoming more popular.
Absolutely, as long as the investment needed to enter the market doesn't exceed the potential profit.
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