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People can still shop around, which is a balancing economic force. What makes people balk isn't just how much money they have, but the competing prices in the m
by ThrustVectoring 11y ago
People can still shop around, which is a balancing economic force. What makes people balk isn't just how much money they have, but the competing prices in the market. Less competitive markets will react to GBI to a much greater extent. I'd expect mobile phone service, internet service, housing, education, and healthcare to raise prices in response to GBI. I wouldn't expect the price of rice, steel, concrete, or airplane tickets to change much.
- donatj 11y ago> I wouldn't expect the price of rice, steel, concrete, or airplane tickets to change much. Not at first, but the price of everything is connected eventually.
- ThrustVectoring 11y agoMy point is that price is the balancing point between selling for as much as you can find a buyer for, and buying for as little as you can find a seller for. Different goods have a different balance of power between buyers and sellers. Gasoline, for instance, has highly visible prices and little product differentiation. Choosing a different gas station is as easy as crossing the street. Customers will tolerate very little increase in price relative to the competition, so the price of gasoline is approximately equal to the cost of selling people gasoline.