2 ms·

It’s like nobody understands supply and demand

by DougN7 7y ago

daenz 7y ago
Everyday people honestly don't understand why prices are what they are. I've had a number of conversations with people and they truly believe that prices are arbitrarily set based on how much owners want to screw customers over. It's easier to think about that way.
- speedplane 7y ago
  > Everyday people honestly don't understand why prices are what they are. I've had a number of conversations with people and they truly believe that prices are arbitrarily set based on how much owners want to screw customers over. Generally, a company will charge the highest price they can get away with, irrespective of the cost it took to produce the good or service. Prices only approach the cost of production when there is strong competition among industry players. Basic tactics like branding, consolidation, and lack of transparency in an industry help subvert competition.
  - imtringued 7y ago
    >Generally, a company will charge the highest price they can get away with, irrespective of the cost it took to produce the good or service. That's not what those "everyday" people think. They think the company can increase the prices beyond the breaking point arbitrarily and always get away with it. That same logic is then used to prevent new competitors from entering because they charge above market rate during their first few years. For some reason they never think about what happens once the suppliers are begging for customers because there is too much competition.
speedplane 7y ago
> It’s like nobody understands supply and demand Folks that use supply and demand principles to argue against UBI don't seem to understand themselves. If everyone is given $1,000/mo, it does not necessarily follow that living costs will also increase by $1000/mo. For that to happen, the additional $1000/mo would need to actually increase everyone's demand for services, which is generally not the case. Having more money generally does not make you want something more, it just makes it easier to afford it. If more people can afford something and start purchasing it in greater numbers, then yes, the price will increase, but they are also getting something the thing of value in return. Put another way, giving everyone $1000 will likely increase prices, but the increased prices will be less than $1000.
- erik_seaberg 7y ago
  Supply and demand break down where increasing supply is practically illegal. As long as there's a severe shortage of housing, landlords can demand as much as the top nth percentile of renters are able to pay, because there is no competing landlord who will take a lower price. If this somehow doesn't drain California dry, it'll be interesting if this enables lots of frustrated marginally-employed people to move to areas with vacant housing (and no jobs, but so what?)

It’s like nobody understands supply and demand

by DougN7 7y ago

It’s like nobody understands supply and demand

Everyday people honestly don't understand why prices are what they are. I've had a number of conversations with people and they truly believe that prices are arbitrarily set based on how much owners want to screw customers over. It's easier to think about that way.

speedplane 7y ago
> Everyday people honestly don't understand why prices are what they are. I've had a number of conversations with people and they truly believe that prices are arbitrarily set based on how much owners want to screw customers over. Generally, a company will charge the highest price they can get away with, irrespective of the cost it took to produce the good or service. Prices only approach the cost of production when there is strong competition among industry players. Basic tactics like branding, consolidation, and lack of transparency in an industry help subvert competition.
- imtringued 7y ago
  >Generally, a company will charge the highest price they can get away with, irrespective of the cost it took to produce the good or service. That's not what those "everyday" people think. They think the company can increase the prices beyond the breaking point arbitrarily and always get away with it. That same logic is then used to prevent new competitors from entering because they charge above market rate during their first few years. For some reason they never think about what happens once the suppliers are begging for customers because there is too much competition.

speedplane 7y ago

> It’s like nobody understands supply and demand Folks that use supply and demand principles to argue against UBI don't seem to understand themselves. If everyone is given $1,000/mo, it does not necessarily follow that living costs will also increase by $1000/mo. For that to happen, the additional $1000/mo would need to actually increase everyone's demand for services, which is generally not the case. Having more money generally does not make you want something more, it just makes it easier to afford it. If more people can afford something and start purchasing it in greater numbers, then yes, the price will increase, but they are also getting something the thing of value in return. Put another way, giving everyone $1000 will likely increase prices, but the increased prices will be less than $1000.

erik_seaberg 7y ago
Supply and demand break down where increasing supply is practically illegal. As long as there's a severe shortage of housing, landlords can demand as much as the top nth percentile of renters are able to pay, because there is no competing landlord who will take a lower price. If this somehow doesn't drain California dry, it'll be interesting if this enables lots of frustrated marginally-employed people to move to areas with vacant housing (and no jobs, but so what?)