3 ms·
The inventory doesn't need to last longer: it needs to yield a higher margin, because you're going to sell fewer units.
by Confusion 15y ago
The inventory doesn't need to last longer: it needs to yield a higher margin, because you're going to sell fewer units.
- jeffdavis 15y agoIt's meaningless to talk about what an individual seller "needs", because they may get much more than they "need" or they may get much less than they "need". In short, the sellers get what they can; regardless of what they "need". I was using the word "need" loosely ("needs to last longer") to mean that it's the economically desirable result for the population at large. If the limited supply lasts longer, then it's still available to those who have the greatest desire for the product (e.g. a company with disks failing in production). The rising prices during a supply interruption seem to be the market working. By that I don't mean it's perfect; I mean if you don't like prices to rise when supply is interrupted, you probably don't like market economies at all.