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Did I read the same article as everyone else here talking about price controls? Cause that isn't what I got from it; term negotiated and contracted prices aren
by StillBored 3y ago
Did I read the same article as everyone else here talking about price controls?
Cause that isn't what I got from it; term negotiated and contracted prices aren't "price controls." The suggested fix here is industry standard practice in many other business-to-business markets where the buyer selects a seller based on not just on how much they are selling it for today, but how long or for how many units they will guarantee the price for. Which is what is being talked about. AKA food supplier negotiates a price and guarantees it for a year.
So, its not a bad plan. Forcing the supplier to manage their costs vs. just passing them on at will gives the supplier an economic interest in suppressing their own suppliers and increasing their delivery efficiency. It pushes some of the price risks away from the individual consumers, who don't have much individual purchasing power.
- lithos 3y agoUS Farm goods already have very regulated prices and output limits.
- johndevor 3y agoCreates overhead and more bureaucracy.
- Ferret7446 3y agoYou're just moving the responsibility around. Someone has to be responsible for arbitraging risk/supply/demand over a long time period. It could be the buyer/intermediary or the supplier. Generally, regulation on how the market self-optimizes is not good, because it will be sub-optional and the market will try to optimize around your roadblock, which simply creates additional inefficiency.