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As costs go up, consumers buy less. There's a certain price which maximizes profit: that's where it ends.
by panic 10y ago
As costs go up, consumers buy less. There's a certain price which maximizes profit: that's where it ends.
- empressplay 10y agoExactly. I have 5 apples. There are 5 people willing to pay at least $2 for them, so I sell them for $2. That's basic economics. With a basic income, now most of these people have more money. So I can charge $3 per apple, and even if I only sell 4 of them I still make $2 more than I made before. I eat the last apple myself, and the person who only has the basic income doesn't get an apple at all. I think universal welfare makes more sense.
- panic 10y agoIf you have a monopoly on the only five apples in the world, why were you charging only $2 in the first place? In a competitive economy, somebody else will be happy to sell an apple to the last person.
- empressplay 10y agoIn practice that's not true and I suggest you research the amount of fruit that's left to rot in fields because companies decide it's not worth selling it.
- deleted 10y ago[deleted]
- sokoloff 10y agoHowever, the $12 you got in case B is not worth as much in the market as the $10 you go in case A, since the economy appears to have suffered 50% inflation in the meantime. Your $12 in case B has a purchasing power equivalent to $8 in case A.