3 ms·
Increased supply reduces prices doesn't it? If I notice BurgerKing and McDonald's are about the same price, I don't conclude that BurgerKing's prices have no im
by TomMckenny 8y ago
Increased supply reduces prices doesn't it? If I notice BurgerKing and McDonald's are about the same price, I don't conclude that BurgerKing's prices have no impact on McDonald's.
- digitaltrees 8y agoYou’re assuming demand is tied to supply. That’s a logical error. If demand is increasing faster than supply there is still scarcity and prices will increase. Is the ratio of supply and demand and the change over time that determines price. Further there is a lot of evidence that wages are unique and resist going down and are slow to rise (because employers are aware of the stickiness of wage levels) In the case of H1B, we are talking about Highly Skilled individuals that are scarce by global standards. Basically the supply of highly skilled employees is less than the demand, even with current levels of immigration. A similar thought experiment: if you build more apartments in NYC, the price won’t necessarily go down because the demand is massive and increasing; it would take a lot of apartments to lower prices in NYC.