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“Supply and demand” refers to the idea that under competition, prices will go down to the marginal cost of production. When a cartel sets a price it's very muc
by littlestymaar 7mo ago
“Supply and demand” refers to the idea that under competition, prices will go down to the marginal cost of production.
When a cartel sets a price it's very much not “supply and demand” who sets the price, it's the cartel…
- WalterBright 7mo agoThe cartel setting a price is still subject to the Law of Supply and Demand. The Law is not about setting a price, it is about how much sales you're going to get at a particular price point. Maximizing the price is not the same thing at all as maximizing profit. Standard Oil made more money by reducing prices, not maximizing them.
- littlestymaar 7mo agoThere are many instances of “the” law, but your argument basically boils down to “who cares about markets, monopolies are good” which is a strange take.
- WalterBright 7mo ago> a strange take and a strawman. Monopolies are still subject to the Law of Supply and Demand, whether they are good or bad.
- littlestymaar 7mo agoIt's not a strawman, right above you said Standard Oil didn't steal anything because monopolies “don't owe [their] customer a discount.”
- WalterBright 7mo ago> “who cares about markets, monopolies are good” I never wrote anything resembling that fabrication, and it doesn't follow from your reply, either.
- littlestymaar 7mo ago> As for Rockefeller being a "robber", the rise of Standard Oil resulted in the price of kerosene dropping 70%. This is your quote right? Now tell me how this doesn't resemble the “fabrication” above? And indeed it follows from my reply as well: if setting prices independently from costs is OK, then monopolies are good. Because market competition is lauded for preventing exactly that.
- WalterBright 7mo agoI quoted "robber" in https://news.ycombinator.com/item?id=47654948 https://news.ycombinator.com/item?id=47654948 when I replied to it. I did not "fabricate" it. > if setting prices independently from costs is OK, then monopolies are good. Because market competition is lauded for preventing exactly that. Your premise does not lead to your conclusion. It doesn't make any sense.
- littlestymaar 7mo agoI'm pretty sure you don't have reading deficiency, yet that's the only explanation I can find for this thread…