‘We may be looking at the end of capitalism’: One of the world’s oldest and largest investment banks warns ‘Greedflation’ has gone too far
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I was going broke trying to feed my cats. It was cheaper to buy chicken and cook it for them. (Maine Coon, 25 lbs, ate a lot)
I see S and D as natural and unalterable as the speed of light.
All efforts to subjugate it result in more human suffering (e.g. hurricane: “can’t raise price of bottled water”: okay, then additional suppliers are not attracted: supplies run out: people thirsty).
If demand is unalterable then why do for profit corporations spend money on advertising?
Yes. All. The. Time. As just one example have you ever heard of a price match?
You're displaying a tremendous amount of ignorance on this subject.
Prices are not and should not be set according to costs. They are set and should be according to supply and demand.
If S and D allow high profits, other suppliers will enter and drive down profits, or demand will drop and drive down profits.
It’s just so majestic.
JFC - not if the cost of entry is high. The market is much more complex than you are apparently able to recognize.
No, I meant the fact that Supply and Demand set prices is unalterable, not that Supply and Demand are not themselves alterable. Our beautiful market alters them every day.
Got it, so you're fixated on a trivial static supply and demand curve and content to ignore the world in motion to worship a pretty obvious feature of markets?
S&D can be manipulated. We see it all the time, especially in FL during hurricane season.
When I was still in CT and we had the bad years, one of which was Sandy, Home Depot could have made generators unattainable. They didn't and they kept the price the same.
When I was still in CT and we had the bad years, one of which was Sandy, Home Depot could have made generators unattainable. They didn't and they kept the price the same.
Cost of entry is a legit factor.
But not the ultimate determiner.
If profit potential is high enough, someone will enter.
It could be for many reasons. One being because a competitor lowered their prices. Another would be to gain market share. Another would be to get rid of inventory. Still another might be a a loss leader.
That you can't grasp that there are many factors affecting pricing tells us that you lack even basic knowledge in this area.
The earlier statement was that competitors drop prices because someone else dropped prices first. So my question was, why did the FIRST company drop prices. Therefore, an answer can’t be “because a competitor dropped prices”.
The other reasons you list are legit, but off topic: My question remains: If “competitors drop (or raise) prices because someone else does so first”, why does that first company do so? (I know the answer.)
True. Which would indicate that prices are “correct”: No “excess profits” to attract suppliers.
Very trivial. You are talking about fictitious widgets and if you want to start thinking about the curves over time, you're also talking fictitious money. We don't know anything about your widgets except the demand curve and the supply curve supplied by the author of the text.
Suppose your widgets are eggs and there's a war going on causing actual scarcity of eggs. The market would allow for wealthy people to hoard the eggs but your poor people are operating arms/munitions factories. Do you suspend the market and feed the people or do you let them grab the guns they've been building and revolt?
No. The answer can be because a competitor dropped their prices - companies have more different and more than one competitor. None of the other answers are off topic - they simply expose your simpleminded view on this.
Are you trying to suggest the only reason the first company drops their price is due to supply or demand? If so, you're dumber than I thought.
That’s a public policy question, not an economic question.
No it doesn't. That's nonsense. If a company has a monopoly, for instance, they can drive excess profits. Companies that collude to set prices can do the same thing.
And excess profits attracting suppliers?
Well, yes, but I realize the actual sequence is not this linear. You are correct that there are myriad simultaneous moving parts to all this. S and D is sort of an overall model of what is happening, but no one can really say why the price moved by how much when.
Economic side: Why are prices what they are?
Policy side: People can’t afford these prices. WTF should we do about it?
So what's your point? This is what has been presented to you but you've been hell bent on supply and demand being the only factors.
Did you finally learn something?
No. Regulation kills monopolies and greed invites collusion.
You're just talking nonsense now.
Economic side: Prices are what they are because citizens/taxpayers prop up a police state/monopoly of violence which functions to protect the rights of people to own and use property and this allows for goods and services to be traded using a market mechanism which determines prices in a way that can be roughly described by this graph that is almost mind blowing the first time you see it drawn up.
This is an excellent point. But it runs both ways. That store in Webster has to pay more for their groceries because the food delivery trucks only get to make one stop there. Their profits may not be more than other food providers.
Good point. And at a time when people don't take very good care of themselves, Dollar General is there to provide chips, soft drinks, candy, other snacks that aren't good for us, but have little if any fresh fruit or healthy snacks.
You say you don't hear about them .... but I've seen articles about cities fighting to keep them from putting one up on every corner and driving out tradition grocery. They are taking over poorer communities.
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