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> That is, New York City, with all its pastrami-and-pizza-hungry tourists and residents fleeing their pocket-size kitchens and young people too busy taking pho
by oneloop 10y ago
> That is, New York City, with all its pastrami-and-pizza-hungry tourists and residents fleeing their pocket-size kitchens and young people too busy taking phone pictures of one another to cook, generates enormous demand for restaurants. There are twenty-four thousand of them in the five boroughs. That demand should (...)
24,000 restaurants is not demand, it's supply. This is the Mr. Market fallacy.
- adevine 10y agoThe author understands that. "That demand" is referring to the tourists, residents, young people, etc.
- oneloop 10y agoI understand that the author understands that "that demand" is tourists. What I meant is that you can't measure the amount of demand (tourists) by looking at the amount of supply (restaurants), which the author does.
- CPLX 10y agoThat's not a sound way of thinking about economics. Seeing that a certain level of supply remains stable over time tells you a great deal about the amount of demand present. Of course it does. Much like looking at the skyline allows you to make some basic assumptions about aggregate demand for office space in Manhattan versus Kearney, Nebraska.
- deleted 10y ago[deleted]
- grkvlt 10y agoExcept where it doesn't work, such as in the restaurant business, where some non-trivial percentage of the supply is superfluous and will go out of business. Of course, they will be replaced, so there is an argument that it is at least stable, even despite the high turnover - perhaps that's what you're meaning?