3 ms·
I think what would be closer to the truth is that the worth of the product to the customer is independent of the cost of manufacture of the product.
by jedimastert 5y ago
I think what would be closer to the truth is that the worth of the product to the customer is independent of the cost of manufacture of the product.
- orev 5y agoYes, this is what I (thought) I was saying, but you seem to have expressed it more clearly. Thanks. However, the fallacy I’m referring to is related to how they report on these things, usually saying something like “the price of the materials went up, therefore the price to the consumer will also go up (by some corresponding amount)”. In reality, the price will only go up if the seller thinks the consumer will pay it. It makes one wonder if this type of article is a move by the company to preemptively plant the justification for the price increase in the public consciousness.
- tomrod 5y agoCorrect. This is why supply is modeled separately from demand. Supply shocks affect prices differently from demand (typically, preference) shocks as well.