Monday, July 06, 2015

Supply and Demand

            Today’s blog starts, as many of them do, with me thinking about things. In this case, supply and demand; how it’s supposed to work compared to how it has come to work.

            First, how it’s supposed to work. It’s all in the name: supply and demand. Supply is how much of something is available and demand is how many people want said something. Say, for example, a farmer in a market has ten apples to sell. If there are only five people who want apples, the farmer lowers the price to make the apples more desirable to purchase. On the other hand, if there are fifteen people who want apples, the farmer raises the price – this way, the people who don’t want the apples very much are dissuaded, the people who still want apples get them, and thee farmer makes more money for his work.

            It is a good system and makes a lot of sense. Sure, the farmer loses out a bit when lowering the price on the apples, but none of the apples go to waste and he’ll probably make a little more money by selling all the apples at a lower price than he would selling a few at a higher one. And while the people who found the higher price on the apples disappointing, it will still have been their choice not to buy one, whereas if the farmer had run out they would be likely to be more upset.

            Since the industrial age, though, this had been skewed. Just about anything can be mass-produced these days, and for a fraction of the cost. Theoretically, that means everything should be cheaper, yet the opposite is true.

            If something looks to be popular, it gets mass-produced. Far more of the item gets manufactured than could possibly be needed, just to make sure more than enough is available wherever it could be wanted. Then all the items are priced to cover the additional cost, along with a healthy profit margin, because if people want something enough, they will pay for it.

            The result is that there are many being sold for several times what they are really worth and there are still a lot left behind as waste.

            So, instead of market prices being controlled by supply and demand, they are now controlled by people seeing how much they can get and generating tons of waste.

            It seems to me that by doing better market research (and with less greed), a lot more could be provided to more people for lower costs, for everything from food to entertainment systems to vehicles.


            We have all the resources and skills to make the whole world run smoothly. Why haven’t we done it?




Click here to find the charity anthology containing a couple of my short stories.


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If there's any subject you'd like to see me ramble on about, feel free to leave a comment asking me to do so.

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