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You acknowledge there are a very large number of complex factors that determine a market price. There isn't a way to neatly summarize that. What kind of explana
by dwaltrip 6y ago
You acknowledge there are a very large number of complex factors that determine a market price. There isn't a way to neatly summarize that. What kind of explanation could you possibly want?
- klodolph 6y ago> What kind of explanation could you possibly want? Something that isn’t a tautology. “Why do you pay $4 for a cappuccino?” “Because that is the market price for a cappuccino.” “What does ‘market price’ mean?” “It means the amount of money people pay in the given market.” You can see that nothing at all has been explained. So when someone says that people are paying a certain price in a certain market “because it is market price”, that is getting things backwards, and not explaining anything at all. It’s like the surly teenager whose parents ask “Where are you going?” and he says, “Out.”
- dwaltrip 6y agoI imagine anyone who could provide a very concise, comprehensive, and accurate explanation for such things would promptly receive a Nobel prize in economics. There are some rough approximations we know to look at (e.g. the "market price" of the inputs, existence of competing products, and so on). But as you clearly noted, there are an immense number of complex factors affecting this.
- bradleybuda 6y agoThere's a very concise explanation for why someone would pay $4 for a cappuccino, and it's the one they teach you in Econ 101: it was worth at least $4 to the buyer, and it couldn't be found more cheaply from a similar (location, quality, convenience) seller.
- dwaltrip 6y agoSure. But that still isn’t terribly satisfactory. Why is it the case that there aren’t buyers and sellers at other prices? I don’t think we can concisely and accurately answer that.