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> You may choose to ignore that and believe someone is selling you something for $5 but that doesn't make it true.

Sir, I suggest you use the word "sell" in its usual way, not your own definition of it. If someone takes $5 and gives you in exchange the merchandise and right of ownership on it, then that indeed does mean they "sell it for $5". The fact that something else is going on doesn't make it false.

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I suggest that the passage that you read begins with a claim that seems unreasonable ("but I've bought a $2 dress from Temu!"), and then explains its thesis in order to make you view that claim in a different way ("VC capital paid for half of that dress!") I also would like to mention that this is a very common and unremarkable way to begin an argument.
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All that aside, I’m happy that VCs are paying for my stuff! I have no idea why they keep doing that. They’ve studied my behaviour so they should already know I’ll delete {app_name} as soon as I get a better deal elsewhere. (Better yet, I’ll keep both and let them fight!)

Maybe they can capture the market for a brief moment, but if they do have a long term strategy, I’m not seeing one.

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I'm not? It drowns out any competition and all we are left with is a single company with a monopoly that speed runs enshitification where consumers lose.
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None of that changes the fact that they are indeed selling it to me for $5 today, so the sentence you quoted is indeed accurate.
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The use of 'loss leaders' has a long history, so is your point that Temu's use of loss leaders may be illegal?*

(*I poked around a bit, and this may be possible, especially in California.)

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