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Imagine you own a grocery store in a small town. The only one, in fact, and the nearest competitor is a 30 minute drive. You, being a free market enthusiast, d
by sgarland 2y ago
Imagine you own a grocery store in a small town. The only one, in fact, and the nearest competitor is a 30 minute drive.
You, being a free market enthusiast, decide to test how much the market will bear, and raise your prices across the board.
Your customers, who are also your neighbors and friends, respond by socially ostracizing you.
This doesn’t exist at scale, because the people responsible for the unnecessary price hikes live far away from their customers, and do not intend to ever meet them, much less explain themselves.
People should price products to make a fair profit, one where both parties are satisfied. I don’t begrudge a car salesperson for selling me a car at above their cost, but I do if it’s wildly marked up.
- lotsofpulp 2y agoI don’t have to imagine, I do it every day. I sell my services for the most amount of money I think I can get. Of course, if I am selling services or goods with lots of repeat business, it might behoove me to not piss off the customers and hence incentivize me to keep my price lower (which is still optimizing for the most money I think I can get, just over the long term rather than short term). If I am selling land or a business, then I am maximizing for that specific transaction, even if my profit margin is 100,000%. When you get a job offer, and you respond back with a request for an additional $20k per year or whatever, that is doing the same thing. > make a fair profit What is fair is an opinion. For people living in huts, a 1,000 sq ft Soviet style apartment bloc with plumbing is unfair. And for people living in Soviet style apartment blocs, a modern 5 over 1 apartment building is unfair. And then you might find a detached single family home unfair. And then you might find a 3k sq ft home unfair. And so on and so forth.