Back in what's often called the "gilded age", late 19th century US, they had an economic problem which had caused a few depressions--bigger than normal recessions, smaller than the "great" depression that happened later. And they were trying to figure out why it was happening, and they concluded that the problem was, ironically, competition. In modern times we normally think of competition as something that, if it's really happening, is the condition that makes markets and capitalism work properly and everything will be hunky dory, and the problem is that it so often isn't really happening. Neoclassical economics says that would be the case if a bunch of assumptions held in real life which actually don't, and most modern economists sort of say that economies sorta probably should be treated as if efficient markets were real.
But the railway economists found a significant problem with how markets for many things worked under price competition. It was a problem that emerged once you started dealing with time, something which basic neoclassical math treats as if it didn't exist. Also, debt. Here's how it works, as I recall it. Say you have two cities, and 10,000 people per month want to travel between them by rail. And say it costs 20 million bucks (in 19th century dollars that are worth something) to build a railway between them and buy the trains and stuff. And say you borrow that money at 6% interest (or alternatively, you have that money, but you eschew investing at 6% interest where you could have and spend it on this stuff instead). So every month you're paying out 6/12= .5% on 20 million dollars, or 100,000 dollars a month. Now if you actually start running that railway, you will also be spending money on coal and engineers and ticket-selling staff and maintenance--operating costs; say it's another 100,000 a month. But you're on the hook for the debt, the "sunk costs", even if you never start running the railway.
Right. Now imagine we have two railways servicing those cities in competition. They each have 5,000 of the customers, and they break even at $40 each, giving them $200,000 a month which just pays off their costs. Both of them would clearly prefer to have all the customers. If one could have all the customers at $35 each, it would be making $350,000 a month, and clearing a profit of $150,000 instead of just treading water. So at some point, if they're genuinely competing, someone's gonna make a move--they'll drop their price to attract more of the customers. But you can already see the problem--if the other one doesn't match it, they'll lose their customers and be losing money. So they'll drop their price, too. Now the new equilibrium has both losing money. Neither can increase their price, lest they lose their customers. They may continue the price war in an attempt to get out of the situation.
But the weird thing is, although they're losing money, they can't just quit. See, they're losing money--but they're still losing less than if they stopped running the railway; they're making more than their operating costs. They can't stop operating, but they can't pay off their sunk costs--they're stuck! The railway economists predicted that in cases of competition where the total available revenue was basically fixed, and sunk costs were significant, price competition would inevitably lead to all the competitors charging prices that left them barely making an operating profit but unable to service the debt for their sunk costs, with losses mounting until some of the competitors went bankrupt. In modern times, probably the most prominent example of this sort of thing is what's happened with airlines, which keep competing on price, going bankrupt, and consolidating into bigger and bigger airlines.
Back in the day, certain tycoons basically "solved" the problem by ending price competition, through monopolies and trusts. This had its own problems which became intolerable during the Great Depression, when governments got serious, for a while, about antitrust laws.