Re: 175 SMK
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: queequeg</div><div class="ubbcode-body">DZ,
While I think we are talking around each other a little, I think we are in agreement to a large extent. The problem economics posesses is that it isn't Chemistry or Mathematics: where the same inputs always yield the same results regardless of viewpoint, agenda or semantics or polemics.</div></div>
This is actually not true. The theories of economics are based on <span style="font-style: italic">observation</span>; the exceptions to them are very limited and beyond the scope of this discussion. All scientific theories must be repeatable; economics is no different.
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">1) You say supply has nothing to do with demand; I'd respond, "Yes and no".</div></div>
They are independent of each other, so you can say "yes and no" if you prefer, but the answer is, as a matter of science anyway, "no."
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">3) I finished (finally, it took 11, part time, years!) college in '89' and went to work for a general contractor doing commercial construction. One day a fax lands on my desk with an ad for a commercial door outfit that listed their unit prices for stuff I had been installing prior to starting with my outfit. Looking at the prices made me a little nauseous: they charged way more than I had been charging and were busy...DOH!!!!!!!!!!!!
Cognitive disonance I believe it's called.</div></div>
Yeah. It's always amazing to me that I can buy stuff and resell it and realize a pretty decent profit.
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">5) My point about geometric price hikes, perhaps has as much to do with client relations/management as with demand/supply elasticity or other academic meandering. Long term Marketing strategies become as important as economics here.
The facts are that; A) people always want a gold chalice at dixie cup prices.
B) People always want a little extra they feel others aren't getting.
C) People always remember feeling cheated. Some may forgive it, but very few forget, and that feeling is not always logical or factual. It does however, exist, and a smart merchant remembers this fact.
So while reloading components were faced with a sudden and huge increase in demand, the response to that demand was both logical and avarcious. Manufacturers have in fact upgraded production capacity and have been working with their suppliers of raw materials and distributors to make this ramped up output get to market.
Consumers, frenetically willing to pay anything, gave rise to a secondary, "extralegal", futures and auction market that gave the price hiking greater momentum. Some retailers have been indifferent to the impression they may be taking advanage of customers, many of whom are feeling pressured from all sides: emplyment pressures, diminished net worth, a increasingly pessimistic business outlook, increased costs for many products and services, etc.
Given the available substitutes, consumers are feeling less guilt in bypassing the retailer in purchasing their reloading supplies online. Retailers can feel free to spout off the teachings of Dr. Freidman or Sowell (I'm a big fan of both), but that won't help them get customers back once they are gone.
Certainly all of this can be explained and justified in purely economic terms. But this does little to ameliorate the views of rational people who feel taken advantage of, whether accurately or not. </div></div>
Friedman was a macroeconomist; his work is pretty useless to this. Sowell's work is extensive and I'm not sure if it covers this issue or not...but these fundamental theories that we're referring to here are literally hundreds of years old.
I think there is some truth to what you're arguing in this segment, but I also think, that on the whole, that it's absolutely wrong.
Some consumers will gripe and scream about the new prices. They might even avoid the retailers who "gouged" during a hike in demand. But, on average, the market will tend to function consistent with price theory.
I know it seems ridiculous to suggest that people will just deal with the massive increase in price during changes in market equalibrium, but I suggest that you observe the market for gasoline. Yeah, people gripe and bitch. But, on average, the market functions and people respond to price changes. Sure, some of us say we're getting gouged, and maybe we are...
But we still buy gasoline and go about our lives. Reloading components are no different. Either the price will ride to cut quantity demanded to a level that keeps product on the shelves, or supply will shift back out to lower prices again, or some of both, but either way, one thing is for certain--capitalism functions because both suppliers and consumers respond to market price. And, we, as consumers, must deal with the fact that the market price is higher today than it was before Obama got elected--because there are more gun owners today than there were on November 3rd.
I think that's a good thing in the long run. But that's a different issue.