> If a big company and a few small companies all have identical costs for producing a product, society is better served by having it produced by the few small companies than the one big company.

Why? That's exactly the circumstances where the mere potential for small companies to pop up is enough to police the big company's behavior. You get lower costs (due to economies of scale) and a very low chance of monopolization. so everyone's happy. In the case of this DRAM/flash price spike, the natural "small" actors are fabs slightly off the leading edge, that will be able to retool their production and supply these devices for a higher profit.

the mere potential for small companies to pop up is enough to police the big company's behavior.

If that were true, "you're in Amazon's kill zone" wouldn't be something VC's say to startups. And yet, they do say that.