Izzactly.
There is no point in spending money on R&D if you haven't got any competition, and certainly no sanity in spending MORE on R&D in the absence of a competitor.
I don't recall saying that prices were inflated, but without competition you will see higher prices, and less innovation, than with competition, and that is something that has been demonstrated ad nauseam.
I shall attempt to explain this:
Wreckage is the CEO of a video card company (for arguments sake, let us pretend this company is Nvidia).
Nvidia is wiping the floor, essentially it's the only video card manufacturer in town.
It has a current top card called the 11TYBILLIONGTXTX.
Wreckage says to himself: 'Lolz, we r teh 1337, ev3ri1 els3 r p00!'
But then he says: 'hMMM, we cud b 3v3n m0r3 1337!
He invests 11tybillion dollars of nvidia's vast profits on a card called the 11TYBILLIONGTXTX+1, which is indeed even more elite.
There's still no competition, and sales bob along cheerfully, with a nice little bump for a new product.
However, the Shareholders say : Lolz, we're not stupid, Wreckage just wasted 11tybillion dollars of our dividends on R&D, when he could have just redesigned the hsf logo, bumped the core 5mhz, and subsequently achieved a far better sales-R&D outlay ratio in the absence of any competition'.
They then say: 'Bye Bye Wreckage, Hello Mr New CEO Business guy who understands economics, lolz'
Wreckage: 'but, but, we r 3v3n m0r 1337!'
Shareholders: 'Security, please escort this man off the premises'
Now obviously i exaggerated some aspects of that example, but surely you can see how much more important R&D becomes in a competitive marketplace? There's actually a purpose to innovating, rather than just doing enough to keep people interested and rake in the cash...
This example also totally skips over pressure on prices, which again is created by competition. Clearly you base your price in a market environment on what is competitive with your competition (duh!), while still assuring continuing R&D to maintain or ideally increase your market share, or you'll simply end up out of business.