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Shortages are irrespective of the severity of price. Shortages imply their is enough demand that normally price would increase to match supply at a given price
by mrep 9y ago
Shortages are irrespective of the severity of price. Shortages imply their is enough demand that normally price would increase to match supply at a given price point but cannot due to outside forces such as price controls.
What you and a bunch of other people confuse as a shortage is just basic market dynamics. Price is high but costs are also high (not a lot of people are willing and capable of being programmers). Cheaper developer prices would be great for businesses but price has to balance with cost and it is useless to call things a shortage for demand that is unsatisfied at a non-market price.
Example: would you say there is a shortage of Tesla model S's since I only am willing to pay $30,000. No, because the costs for a model S is higher than that and then everything would be considered a shortage at a low enough price point.
- greglindahl 9y agoThat is a terrible example. Above a certain wage, jobs disappear because there is not enough value created to pay a higher wage. That's quite different from a consumer buying a luxury good.
- mrep 9y ago> Above a certain wage, jobs disappear because there is not enough value created to pay a higher wage. Exactly my point! Economists don't call situations where costs (wages for developers) exceed what the market will pay (value created) "shortages". Whether a good is "luxury" or not makes no difference.
- stale2002 9y agoThat might be the way that economists describe shortages, but it is not the way that normal people describe shortages. Personally, my definition of a shortage is "There is not enough of X, and it would be a very good thing to increase X". Using my bread example, if bread cost 100$ a loaf, and people were literally starving to death because they couldn't buy bread or other food, then there IS a shortage of food. It does not matter if "supply is equaling demand", because it is a very bad thing for food to cost 100$ a meal.