3 ms·

> with no change in supply This may be your misunderstanding. The 'equation', for lack of a better word, is supply and demand, not just supply. Market conundru

> with no change in supply This may be your misunderstanding. The 'equation', for lack of a better word, is supply and demand, not just supply. Market conundrums can normally be solved by change in either supply or demand. A shortage occurs when a situation prevents price from rising, thereby warding off a change in demand. This is where an alternative selection mechanism — examples including a lottery, needs-based, or first-come, first-served — will typically step in to solve the dispute given the constraints in supply. > Shortage is less information Less information than what? As you can see, when we removed shortage in the above examples, the reader was left with the exact same information. No information was lost at all. Shortage added absolutely nothing.

Dylan16807 3y ago
> This may be your misunderstanding. The 'equation', for lack of a better word, is supply and demand, not just supply. Market conundrums can normally be solved by change in either supply or demand. > A shortage occurs when a situation prevents price from rising, thereby warding off a change in demand. This is where an alternative selection mechanism — examples including a lottery, needs-based, or first-come, first-served — will typically step in to solve the dispute given the constraints in supply. Raising the price so high that demand disappears is not a way to alleviate a shortage. If 95% of the houses in the world disappeared overnight, that would cause an extreme housing shortage, even if it's a perfect free market where anyone with X amount of money can still get a house. You can always find a point on the demand curve that fits any supply situation. That doesn't stop there from being shortages. "Shortage" is not a niche word that only applies when supply and demand has been prevented. > Less information than what? As you can see, when we removed shortage in the above examples, the reader was left with the exact same information. No information was lost at all. Shortage added absolutely nothing. This is like saying "If I give a three minute explanation, and also a 20 second summary, the summary added absolutely nothing." The advantage of the summary is that you can use it in lieu of the full explanation and it's a lot quicker.
- randomdata 3y ago
  > Raising the price so high that demand disappears is not a way to alleviate a shortage. Then this must mean that there is a shortage of jets? I most definitely am not paying that high price – you presumably aren't paying that high price – the price of jets is so high that demand has disappeared from almost all people. I'd certainly buy one if they were significantly cheaper. Who wouldn't? But at the prevailing price, no way. Does that differ from a $1 plastic trinket? I'd take a plastic trinket if it were free, but for $1 my demand is lost. I'd rather spend $1 on something else. I guess that means the plastic trinket is also in shortage since I have decided not to buy due to the price tag being too high? And not just me. The average run for a plastic trinket is around 25,000 units, so we know demand disappears by the vast majority of people at the high price of $1. What's not in shortage? Even literal garbage will see an increase in demand if the price goes low (negative) enough. > If 95% of the houses in the world disappeared overnight, that would cause an extreme housing shortage Agreed. The nature of lag would ensure that price could not react in a timely manner to such an extreme event. Eventually correction could take place, but a shortage would ensue for a period of time. > "Shortage" is not a niche word that only applies when supply and demand has been prevented. What on earth does "supply and demand being prevented" mean? You cannot prevent supply and demand. It's not a thing that can be manipulated, it's just the observation of humans (and sometimes animals!) interacting with each other in the face of scarcity. > "If I give a three minute explanation, and also a 20 second summary, the summary added absolutely nothing." Well, then, let's reverse it: "Housing, there is a shortage" and "Housing, there is not a shortage". What did I learn from those statements? We will assume I didn't learn that price is able to rise in one case and not in the other. But there is nothing else I can possibly learn from that. It doesn't say anything. If I read you correctly, I am of the understanding you intend it to mean that housing costs more/less than some "reasonable" number range you've randomly come up with, but as you have not communicated the range held in your mind, it leaves me with nothing. The only way that can work is for you tell me the range, but once you've done that, "shortage" doesn't add anything. Why would you include it?
  - Dylan16807 3y ago
    If you can't learn any information from "shortage" then that's your problem. Most people can. > Agreed. The nature of lag would ensure that price could not react in a timely manner to such an extreme event. Eventually correction could take place, but a shortage would ensue for a period of time. Even after the prices correct, it would still be a shortage. Digging out of that pit of missing units would take orders of magnitude longer than the price adjustments. > jets, trinkets You could easily get a trinket at trivial cost if you wanted it, so it's not a shortage. For jets, we need to consider the utility of them and the production cost. You can't get one, but having one is not important to you, and the price is not being inflated by supply problems. So it's not a shortage (For individuals, at least. Airlines or countries can experience a jet shortage.) > What on earth does "supply and demand being prevented" mean? You cannot prevent supply and demand. It's not a thing that can be manipulated, it's just the observation of humans (and sometimes animals!) interacting with each other in the face of scarcity. The stuff you said earlier about government intervention, lotteries, etc.

Dylan16807 3y ago

> This may be your misunderstanding. The 'equation', for lack of a better word, is supply and demand, not just supply. Market conundrums can normally be solved by change in either supply or demand. > A shortage occurs when a situation prevents price from rising, thereby warding off a change in demand. This is where an alternative selection mechanism — examples including a lottery, needs-based, or first-come, first-served — will typically step in to solve the dispute given the constraints in supply. Raising the price so high that demand disappears is not a way to alleviate a shortage. If 95% of the houses in the world disappeared overnight, that would cause an extreme housing shortage, even if it's a perfect free market where anyone with X amount of money can still get a house. You can always find a point on the demand curve that fits any supply situation. That doesn't stop there from being shortages. "Shortage" is not a niche word that only applies when supply and demand has been prevented. > Less information than what? As you can see, when we removed shortage in the above examples, the reader was left with the exact same information. No information was lost at all. Shortage added absolutely nothing. This is like saying "If I give a three minute explanation, and also a 20 second summary, the summary added absolutely nothing." The advantage of the summary is that you can use it in lieu of the full explanation and it's a lot quicker.

randomdata 3y ago
> Raising the price so high that demand disappears is not a way to alleviate a shortage. Then this must mean that there is a shortage of jets? I most definitely am not paying that high price – you presumably aren't paying that high price – the price of jets is so high that demand has disappeared from almost all people. I'd certainly buy one if they were significantly cheaper. Who wouldn't? But at the prevailing price, no way. Does that differ from a $1 plastic trinket? I'd take a plastic trinket if it were free, but for $1 my demand is lost. I'd rather spend $1 on something else. I guess that means the plastic trinket is also in shortage since I have decided not to buy due to the price tag being too high? And not just me. The average run for a plastic trinket is around 25,000 units, so we know demand disappears by the vast majority of people at the high price of $1. What's not in shortage? Even literal garbage will see an increase in demand if the price goes low (negative) enough. > If 95% of the houses in the world disappeared overnight, that would cause an extreme housing shortage Agreed. The nature of lag would ensure that price could not react in a timely manner to such an extreme event. Eventually correction could take place, but a shortage would ensue for a period of time. > "Shortage" is not a niche word that only applies when supply and demand has been prevented. What on earth does "supply and demand being prevented" mean? You cannot prevent supply and demand. It's not a thing that can be manipulated, it's just the observation of humans (and sometimes animals!) interacting with each other in the face of scarcity. > "If I give a three minute explanation, and also a 20 second summary, the summary added absolutely nothing." Well, then, let's reverse it: "Housing, there is a shortage" and "Housing, there is not a shortage". What did I learn from those statements? We will assume I didn't learn that price is able to rise in one case and not in the other. But there is nothing else I can possibly learn from that. It doesn't say anything. If I read you correctly, I am of the understanding you intend it to mean that housing costs more/less than some "reasonable" number range you've randomly come up with, but as you have not communicated the range held in your mind, it leaves me with nothing. The only way that can work is for you tell me the range, but once you've done that, "shortage" doesn't add anything. Why would you include it?
- Dylan16807 3y ago
  If you can't learn any information from "shortage" then that's your problem. Most people can. > Agreed. The nature of lag would ensure that price could not react in a timely manner to such an extreme event. Eventually correction could take place, but a shortage would ensue for a period of time. Even after the prices correct, it would still be a shortage. Digging out of that pit of missing units would take orders of magnitude longer than the price adjustments. > jets, trinkets You could easily get a trinket at trivial cost if you wanted it, so it's not a shortage. For jets, we need to consider the utility of them and the production cost. You can't get one, but having one is not important to you, and the price is not being inflated by supply problems. So it's not a shortage (For individuals, at least. Airlines or countries can experience a jet shortage.) > What on earth does "supply and demand being prevented" mean? You cannot prevent supply and demand. It's not a thing that can be manipulated, it's just the observation of humans (and sometimes animals!) interacting with each other in the face of scarcity. The stuff you said earlier about government intervention, lotteries, etc.