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The law of supply and demand is not an enacting force, it's an observation of behaviour. Just like the law of universal gravitation does not determine gravity,
by randomdata 2y ago
The law of supply and demand is not an enacting force, it's an observation of behaviour. Just like the law of universal gravitation does not determine gravity, the law of supply and demand does not determine price. People (or other animals, I suppose) determine price.
When you get into the meat of it, what the previous commenter is trying to say is that rent is quite inelastic and thus people will happily pay a lot more than is necessary when you can employ some clever marketing tricks. But the strange wording has it going all over the place.
- pixl97 2y ago>The law of supply and demand is not an enacting force, it's an observation of behaviour. Economic behavior is not physical law. Awareness of economic behavior can change behaviors. For example if you observed that ice cream stocks went up the day that hot weather was forecast you'd quickly find yourself in a battle to predict when it was going to be hot at earlier and earlier dates. >happily pay a lot more than is necessary when you can employ some clever marketing tricks. And the marketing trick is called lowering supply. >People (or other animals, I suppose) determine price. Quite often by controlling supply https://en.wikipedia.org/wiki/Onion_Futures_Act https://en.wikipedia.org/wiki/Onion_Futures_Act
- randomdata 2y ago> And the marketing trick is called lowering supply. The original contextual comment indicated that there was no reduction in supply, merely false claims of the "there is only one unit left!" nature. Normally a buyer would look around to make sure the claim is true, but I guess the idea is that people get so emotional about housing that they don't give it a second thought, which plays into why there is such inelasticity to exploit. Try reading the thread before replying next time.