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> There is a SINGLE driver of price for a is product: how much people will pay for it. Yeah no. Actually there are two main drivers, the one you mention (calle

by CPLX 8y ago

> There is a SINGLE driver of price for a is product: how much people will pay for it. Yeah no. Actually there are two main drivers, the one you mention (called “demand”) and the one you’re leaving out (called “supply”). The concepts of supply and demand aren’t even a little novel or unheard of. So it’s the interaction of people’s willingness to pay with the availability of other options or close substitutes, and the desire of firms to supply those items at a given price level.

coldtea 8y ago
>Yeah no. Actually there are two main drivers, the one you mention (called “demand”) and the one you’re leaving out (called “supply”) Yeah, no. What the parent said covers both demand and supply. Price is exactly what people are willing to pay given both demand and supply.
- CPLX 8y ago
  This is not correct. If the willingness to pay does not correspond to a willingness to sell there is no transaction. The actual selling price and quantity sold is determined by the interaction between supply and demand. This concept is first day, first hour, of any discussion of economics.
  - coldtea 8y ago
    >This is not correct. If the willingness to pay does not correspond to a willingness to sell there is no transaction. We're talking about prices as verified by millions of transactions (Apple's unit sales), so that's already solved. E.g. the actual prices they managed to sell things, not just some sticker price for unsold products.
- walterbell 8y ago
  > Price is exactly what people are willing to pay given both demand and supply. In a theoretical competitive market. Not so much when some companies have exclusive access to parts of the supply chain, thanks to years of vertical integration and supplier financing.
orev 8y ago
Supply/demand is part of the calculation a consumer uses to determine what price they want to pay, and the final result of that calculation is the actual price they are willing to pay.
- CPLX 8y ago
  Incorrect. Only demand is determined by the consumers. Supply is determined by the willingness of those with resources to supply those resources at a given price.
  - stouset 8y ago
    You are straw-manning the original argument. GP said nothing about consumers controlling supply, just that it is part of the calculation that is used when a consumer determines a price they are willing to pay. If you’re going to try and be a pedant, at least base your reply on the actual argument you’re responding to.

by CPLX 8y ago

coldtea 8y ago

>Yeah no. Actually there are two main drivers, the one you mention (called “demand”) and the one you’re leaving out (called “supply”) Yeah, no. What the parent said covers both demand and supply. Price is exactly what people are willing to pay given both demand and supply.

CPLX 8y ago
This is not correct. If the willingness to pay does not correspond to a willingness to sell there is no transaction. The actual selling price and quantity sold is determined by the interaction between supply and demand. This concept is first day, first hour, of any discussion of economics.
- coldtea 8y ago
  >This is not correct. If the willingness to pay does not correspond to a willingness to sell there is no transaction. We're talking about prices as verified by millions of transactions (Apple's unit sales), so that's already solved. E.g. the actual prices they managed to sell things, not just some sticker price for unsold products.
walterbell 8y ago
> Price is exactly what people are willing to pay given both demand and supply. In a theoretical competitive market. Not so much when some companies have exclusive access to parts of the supply chain, thanks to years of vertical integration and supplier financing.

orev 8y ago

Supply/demand is part of the calculation a consumer uses to determine what price they want to pay, and the final result of that calculation is the actual price they are willing to pay.

CPLX 8y ago
Incorrect. Only demand is determined by the consumers. Supply is determined by the willingness of those with resources to supply those resources at a given price.
- stouset 8y ago
  You are straw-manning the original argument. GP said nothing about consumers controlling supply, just that it is part of the calculation that is used when a consumer determines a price they are willing to pay. If you’re going to try and be a pedant, at least base your reply on the actual argument you’re responding to.