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Market clearing prices can be negative i.e. you have to pay someone to "buy" them. This regularly happens in commodities markets. In agriculture, for example, n
by jandrewrogers 3mo ago
Market clearing prices can be negative i.e. you have to pay someone to "buy" them. This regularly happens in commodities markets. In agriculture, for example, negative market clearing prices is why a lot of food ends up in a landfill instead of on store shelves.
- nairboon 3mo agoSure, negative clearing prices indicate overproduction. Thus producer should lower their output and not destroy the output. I know that from a finance perspective, it could make sense to destroy some products instead of lowering prices, but from a human perspective that sounds so stupid, especially if you consider food or livestock!