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People seem to expect the free market to adapt immediately, for consumers immediate benefit. The market will regulate itself, but it may not happen in timeframe
by kuratkull 4y ago
People seem to expect the free market to adapt immediately, for consumers immediate benefit. The market will regulate itself, but it may not happen in timeframes that people are comfortable with.
- m000 4y agoNo, consumers just expect it to show consistent reaction times. A rumour is typically enough to warrant an overnight price hike in consumer prices. While for experiencing reductions, consumers have to wait for a few months for the market to "adapt". And in the end, it usually is the consumers that adapt to the increased prices, so companies don't see any good reason to reduce them.
- MichaelZuo 4y agoThat is how the market works? Look at any stock in any stock market that had a highly positive or negative rumour associated. You will see an immediate spike or dip in value and, a slow regression to the mean.
- OkayPhysicist 4y agoYou missed what they said: the problem is that consumer prices are not symmetric like that: prices spike, and then regress, but they never sharply dip.
- vba616 4y agoWhat causes you to believe in the premise other than it being repeated a hundred times a day? I don't understand why people waste electrons making comments that cannot even be right or wrong without specific data and defined terms.
- MichaelZuo 4y agoIf you pay market rate, then by definition it's symmetric. If you pay a managed rate, subsidized rate, flat rate, etc., then it probably won't be. Which is the case for electricity and natural gas. Consumer goods that are usually priced at market rate, such as clothing, regularly see deep discounts.
- AbrahamParangi 4y agoThat's because if a company makes too much profit, it's being potentially inefficient - but if it makes too little profit, it goes out of business.
- pasquinelli 4y agookay, but that excess profit is consumers' money and workers' time, so of course ordinary people are pissed.
- benj111 4y agoHow is a company inefficient if it makes 'too much' profit? Whom decides what is too much?
- m000 4y ago> if a company makes too much profit, it's being potentially inefficient That's the theory. Reality: if a company makes too much profit, it's probably a monopoly or have formed a cartel with their "competitors".
- cameronh90 4y agoYou can - at least in the UK - switch consumer energy suppliers if you feel like your current energy provider is charging too much. However, the recent crisis sent a large number of consumer energy suppliers into bankruptcy, suggesting that actually they'd been keeping too little back rather than fleecing the consumers.
- deleted 4y ago[deleted]
- vba616 4y agoIt makes sense to me that this should be the case, without any conspiracy, because physical things require lead time and inventory. But have you looked at a chart that proves this claim that everybody makes and assumes is true?