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This is touched on in the Wikipedia article, but it's interesting that the onion market is well known for being significantly more volatile (and thus, bad for f
by Lazare 7y ago
This is touched on in the Wikipedia article, but it's interesting that the onion market is well known for being significantly more volatile (and thus, bad for farmers) than other normal markets for vegetables.
It is a literally textbook example in why banning derivatives is unlikely to be the easy fix some imagine for market failures.
- eru 7y agoAnd gives you a hint for why banning 'price gouging' doesn't help either. (Despite the overall strong sentiment in favour of such silly laws in the discussion on this article. Economics can be a bit counter-intuitive for humans.)
- deleted 7y ago[deleted]
- Lazare 7y agoAgreed 100%. Also, here's an interesting story: https://www.ft.com/content/6a09e4a6-655a-11ea-b3f3-fe4680ea68b5 https://www.ft.com/content/6a09e4a6-655a-11ea-b3f3-fe4680ea6... > French industrials group Air Liquide is selling its Schülke unit, whose products range from the alcohol-based hand rubs that have become a hot commodity since the outbreak started, to hospital disinfectants and industrial cleaning products. > > It is asking would-be buyers to offer a higher sum than it first envisaged when the sale process began last year, according to people familiar with the situation, reflecting what one person called the “coronavirus effect”. Of course, the reason the business might be worth more is because it's going to make higher profits. In theory Air Liquide could cut prices to ensure its profits stayed the same. In fact, not doing so means they're profiting off Covid-19, right? Which I guess suggests the real problem with what this guy did is scale; he only had a few thousand bottles. If he'd only realised he should have been buying a factory!
- eru 7y agoOr building one!