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This is generally called Jevons paradox: When you make something more efficient, demand rises because it is more efficient, which in the end leads to using more
by tpxl 7y ago
This is generally called Jevons paradox: When you make something more efficient, demand rises because it is more efficient, which in the end leads to using more of the base resource (but getting a lot more for it).
https://en.wikipedia.org/wiki/Jevons_paradox# https://en.wikipedia.org/wiki/Jevons_paradox#
- ClumsyPilot 7y agoNot true at all, like all paradoxes its loosely defined and not quantified, so should not be taken too seriously. Demand I crease assumes that demand is perfectly elastic, which it isnt for ant real world case - price of shoes dropping 100x would not result in demand for shoes going up by same amount. In fact many demands are totally inelastic, I.e. food consumption does not change much, because people have to eat the same amount of calories. Secondly the price of a good is made up of more than its base resource, it's people's time, arketing, opportunity cost etc. So a 2x increase in resource efficiency of shoes manufacturing does not result in shoe price dropping 2x.
- tpxl 7y agoI'm sorry, I was not trying to imply that it always happens that way, just that it (paradoxically) sometimes does and it has a name. I agree with what you wrote.