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> If producers are able to totally game a commodity market and control prices so completely than you have bigger problems than just poverty. Game is probably m
by ktaylora 6y ago
> If producers are able to totally game a commodity market and control prices so completely than you have bigger problems than just poverty.
Game is probably more strongly worded than what actually happens : a shift in the demand curve. It's not that a cabal of producers are colluding to raise prices. Its more that, in aggregate, producers will decide to independently raise prices when consumer demand increases [0].
[0] https://www.economicsdiscussion.net/demand/shifts-in-demand-and-supply-with-diagram/12519 https://www.economicsdiscussion.net/demand/shifts-in-demand-...
- zanny 6y agoExcept if its just a price shock than the increased profitability of apples will attract investment in apple farming to produce more apples because of unmet demand and fair market conditions. The price would go up, the profitability margin would be exploited by increased competitive production up to near break even costs, and prices would fall back to where they are today just with way more apples being grown. In practice in pretty much every industry in the US incumbents put up regulatory barriers behind themselves to prevent competition from emerging.