[OT] bread prices and economics] [WAS] Re: Woohooo! Dell + Linux

On Fri, 30 Mar 2007 10:35:23 -0500
John Hasler <jhasler@xxxxxxxxxx> wrote:

Celejar writes:
Doesn't basic economics dictate that given competition, the equilibrium
price is determined by both supply and demand? Even if I'm willing to pay
a great deal, if the cost to produce the item is low, competition should
drive down the price.

People who buy cheap white bread buy cheap white bread. They just want
something to stuff in the kids' mouths. Price is almost all that matters.
People who buy whole wheat bread are picky. They want bread that they
believe fits their notions about nutrition and are influenced by what their
friends say and by the labeling and advertising. Price is far from their
sole criteria: some will deliberately avoid the cheapest brand because they
believe that it must be inferior. Some will buy the most expensive brand
because "you get what you pay for" or just so they can brag.

Well, yes, much recent work on economics has apparently shown that the
old assumption of economists that people behave rationally has been
greatly exaggerated.

Are you implying that the market is a monopoly or oligarchy?

No. The generic white bread market and the whole-wheat bread market are
two different markets with different elasticities. This results in
different equilibrium prices even with identical costs (which they probably
aren't). This is basic economics. Did you not study it at university?

The bottom line is that if the cost is the same or lower (the
assumption of the OP, because less processing is done), then given
perfect competition, the price should be, too. I'm not exactly sure
what you mean by elasticity in this context (I know a bit of economics,
but I didn't study it at university). Elasticity of demand, AFAIK,
means greater flexibility for the consumer to do without a product or
to substitute something else for it if the price increases. I don't see
how that explains a price differential not based on higher costs.

Celejar


--
To UNSUBSCRIBE, email to debian-user-REQUEST@xxxxxxxxxxxxxxxx
with a subject of "unsubscribe". Trouble? Contact listmaster@xxxxxxxxxxxxxxxx

Relevant Pages

  • Caster levels, schools and prices for artifacts
    ... Craft Wondrous Item, ... Price 107824 gp. ... for divine spellcasting ability is offset by the cost of damaging ...
    (rec.games.frp.dnd)
  • Re: oem vs retail full version
    ... Possibly "Simple economics", however it is up to the owner to decide ... People that think just because the price is to high and pirate ... Cost does nothing to justify theft. ... > prices and thereby make piracy profitable, ...
    (microsoft.public.windowsxp.general)
  • Re: von Mises Institute on Henry George
    ... Are you trying to imply that carrying cost forces the car dealer to ... put the cars on the market, and work to get their highest market ... of that cost back from sales due to the 100% tax, ... price of $1, or "take what you can drive". ...
    (sci.econ)
  • Re: Will Dell OEM Vista install on another Dell PC?
    ... The cost of the media is completely immaterial to the price of the software ... Justify stealing for me. ... We're talking about the customer paying for one hamburger and stealing ...
    (alt.sys.pc-clone.dell)
  • Re: F, etc.
    ... that a "cancer only" med can get away with. ... I can't figger why they cost so much. ... that is part of every med's price. ... a taste of my pre-January life again. ...
    (alt.support.chronic-pain)