It’s not an unpopular opinion but it might be a tankie shitpost. I just really fucking wish people would explain their reasoning rather than just blatting out a stupid idea. This one isn’t stupid, per se, but if you want actual feedback you should say why you hold this opinion so people can tell you where they agree and disagree and it’s not just a downvote fest.
Having said that, this is the least stupid of a series of incredibly vapid posts, so I’m writing a response.
Yes, there is a supply/demand relationship. Let’s say you make 50 widgets a year and sell them for a dollar. Then a new use comes out for them, and people are willing to pay two dollars (this is actually the story behind the kong dog toy coming from a VW part). So now you can increase production, but eventually you’ll run out of customers, so you can reduce the price to $1.50, and so on. You can see this happening in real time in commodities markets, where oil producers will cut output to drive up prices, or increase it to drive them down (eg if they want to reduce oil production in other countries).
Where you’re not wrong is that it’s a highly idealized model, like a lot of basic economics. It works best with commodities, but we’ve seen it with video cards, hard drives, cars, and so on. However, the more complex the market, the more factors beyond supply and demand are involved. There are things like sticky prices, information disparity (look up a paper called “A Market for Lemons”), and biases like those that won experimental psychologist Daniel Kahneman the Nobel prize in economics.
It’s not an unpopular opinion but it might be a tankie shitpost. I just really fucking wish people would explain their reasoning rather than just blatting out a stupid idea. This one isn’t stupid, per se, but if you want actual feedback you should say why you hold this opinion so people can tell you where they agree and disagree and it’s not just a downvote fest.
Having said that, this is the least stupid of a series of incredibly vapid posts, so I’m writing a response.
Yes, there is a supply/demand relationship. Let’s say you make 50 widgets a year and sell them for a dollar. Then a new use comes out for them, and people are willing to pay two dollars (this is actually the story behind the kong dog toy coming from a VW part). So now you can increase production, but eventually you’ll run out of customers, so you can reduce the price to $1.50, and so on. You can see this happening in real time in commodities markets, where oil producers will cut output to drive up prices, or increase it to drive them down (eg if they want to reduce oil production in other countries).
Where you’re not wrong is that it’s a highly idealized model, like a lot of basic economics. It works best with commodities, but we’ve seen it with video cards, hard drives, cars, and so on. However, the more complex the market, the more factors beyond supply and demand are involved. There are things like sticky prices, information disparity (look up a paper called “A Market for Lemons”), and biases like those that won experimental psychologist Daniel Kahneman the Nobel prize in economics.