If the Law of Supply and Demand really worked, then why isn't ice cream cheaper in winter?
OF course, prices go up when there is scarcity, and they go down when there is a surplus. You don't need a Magic Scientific Law to figure that out. But supply can be manipulated, and so can demand. That's why we have monopolies and cartels, and advertising, and marketing. Shit, that's what the Marketing Department in your local Business School is all about: how to get around the Law of Supply and Demand. They actually give out college degrees in that!
IN THEORY, supply will eventually balance demand so that the price of commodity will stabilize around some number that is a reasonable compromise for the producer and consumer. What happens in the real world is that supply, demand and price are adjusted so that profit is maximized. Oh sure, fair competition can disrupt that little scam, but what do real businessmen do? they manipulate the market until they drive their competition out of business, and then they optimize the demand curve to maximize the profit. There comes a point in that curve where altering the supply, the demand, or the price of a commodity or product will cause the profit to drop. So you adjust production and price until profit is maximized. As for those who can't afford that product at that price, well, they'll just have to do without. Now, if that product is stadium tickets or cruise ship prices, nobody gets hurt. But if its real estate or fresh vegetables, or insulin, people get sick, or sleep on the street, or die.
You see, the dirty little secret of free markets is that you can't get rich in one. Your are always hanging on by your fingernails, competing with other capitalists for raw materials, labor, sales. The whole point of being a good businessman is avoiding all that: making sure the market is not free.
You want evidence? Look at OPEC. You see, rockets and airplanes do not mean gravity doesn't exist. They mean gravity doesn't matter.
Off Topic » in reply to In your defense
We've covered this before, but you refused to accept it.
The whole thread (75 posts)
- What's the big deal about rate hikes?
- Contrary to popular belief...
- Wow
- podinium
- podinium is basically worthless
- Economics is not physics
- In your defense
- We've covered this before, but you refused to accept it.
- As for ice cream...
- OMFG this is frustrating
- We've covered this before, but you refused to accept it.
- podinium
- Wow
- 1980
- Contrary to popular belief...