Whatever the market will bear

#1

Just yesterday, I noticed some dog bowls for sale for $22. (Well, technically, for $21.99; but that is really over $23, given a sales tax of 9.75 percent.)

My guess is that these bowls probably cost no more than three or four dollars–at the most–to produce.

To my way of thinking, that is simply unconscionable. It is whatever-the market-will-bear pricing–rather than pricing to turn a reasonable profit.

And the former is certainly not what capitalism is all about, in my view.

Comments?

#2

Counterpoint: if you don’t remove disposable money from the gullible they’ll use it in other more destructive ways … like supporting the Democrat Party.

#3

So long as dogbowls are not necessities…I dont care.

Homes? Water? Basic foods? I care. Yes… homes…I mean houses. Jacking the price of homes up for fun and profit is contrary to my sense of morality and acceptable social behavior.

#4

download

#5

The fact that you did not buy them because they are overpriced … is a great example of how the market works – and should work.

I don’t see the problem.

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#6

Pet Rocks

Cha Pets

Happy Fun Ball (do not taunt)

Vs

People who in essence demand more laws to protect people from themselves

#7

We never even thought to purchase them.

They happened to be in a pet store, in which my wife and I went, to see the veterinarian about her sick Maltese.

I just noticed the bowls, on an aisle near the back of the store, where the vet works.

#8

If they were priced at a price that attracted you and you bought one, that would be “the market”. If nobody wants them at that price, they’ll still be there the next time you visit. And that would be “the market”.

If people want that kind of bowl and are not turned off by the price, and they buy it, that would be “the market”.

If they are still there in 6 months and the pet store slashes the price 50%, that would be “the market”. Personally, I wouldn’t buy a dog bowl for $12, much less $23. And that’s “the market”.

The market lets a provider of goods or services to ask whatever price he wants. The market tells that provider if he priced his asking price properly.

And it’s the provider’s prerogative (and even good business sense) to maximize his asking price to the point that the market will maximize his net income. At every price point, x-many sales will result. More and more sales occur the lower the price he sets. But profit decreases as the price is decreased. It’s a basic micro-economic exercise to find that point where income is maximized.

It’s micro-econ 101.

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#9

That IS precisely how the capitalistic system works and is supposed to work. As long as it isnt being sold at the pointy end of a stick, They can sell it for whatever price people will buy it at.

My pet annoyance is with Traegar Smokers. Overpriced as all get out. And people will buy the made in China pieces of crap…and good on them.

#10

What you fail to take into account if it’s product in China there are taxes to be paid.

Export taxes are common i.e. the minerals export taxes.

#11

This is EXACTLY what capitalism is about. The people get to decide what too much is. If the price is too high, they buy less and those natural resources end up being shifted into a more profitable product. This is how the free market regulates itself. If that bowl isn’t worth $22 to you, you’ll find a cheaper one. If it is, you’ll exchange your $22 for that bowl. FREEDOM.

You have NO BUSINESS dictating what a “reasonable profit” is on a product. That’s between the manufacturer and the consumer. If the consumer thinks it’s excessive, they won’t buy it. It’s not like you have to buy a $22 bowl, you can go buy something cheaper.

I wish people would stop thinking they have the right to tell others what they have to charge for stuff. Don’t like it? Don’t buy it. That’s why I’m against big government. Don’t like it? Well, fuck you, you’re paying it because if you don’t, you go to jail. Capitalism isn’t perfect but it beats the hell out of the alternative.

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#12

Nope. Free market reigns. Government has no business deciding fair prices. If company X starts charging too much for homes, company Y will start up and start offering cheaper homes. Supply and demand. Consumers decide what too much is. The ONLY place where government belongs in my opinion is in breaking up monopolies where every time competition comes into the fold they get shut down… but unfortunately, usually when there’s a monopoly, it’s DUE to government control.

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#13

I said nothing about the government.
Lots of things are legal but neither moral nor ethical.

If your position is that you need the government to tell you what is right and wrong then we got nothing else to talk about.

I don’t see you arguing over in the abortion thread with the logic of “well it’s legal, so it’s OK.” No. You have moral standards that are independent of the government. As I do.

But of course the rationale of “If I dont do it, someone else will.” will own the day for many.

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#14

I probably made a leap but usually when people start harping on capitalism and prices, they end up wanting control from the government. It’s kind of a reaction from me now to suggest we be very careful about talking about the morality of prices because there’s only one way to set those prices by force… government. I want the free market to set those prices because the government will fail miserably. My position is the exact opposite of what you mentioned. I want government to stay out of the pricing debate and let supply and demand set those prices.

With that said, I don’t agree with morality discussions regarding pricing. I want consumers refusing to buy from companies that aren’t providing fair pricing but that needs to be achieved through competition, not a mandate at any level.

Lastly, I would never argue abortion is legal so it’s ok. It’s still murder. What we’re talking about, though, isn’t murder and it’s not harmful. It’s a free exchange of money for product and so long as one company isn’t grabbing up the market and creating a monopoly or colluding with another company to drive the price up, I’m fine with it. I trust the free market far more than I trust government. It’s a false analogy to try to draw a parallel between abortion and prices of products on the free market. One causes harm, the other doesn’t.

Just use my rental homes as a great example. When I rent a home, it has nothing to do with morals. Has nothing to do with fairness. It has to do with market value. If I have a home that costs me $1100 a month all in and the market price is $1200, I have no choice but to rent it for $1200 and slap myself for such a low ROI. With that said, if I get a good price on that house and my all in is $700 while the market rent is $1200, should I be required to rent it for $900 because that would be deemed a moral or fair value? Of course not. I should be able to rent it for market value, though I usually drop $25-$50 back from fair market value to be able to grab my choice in renters due to the bargain and guess what… it benefits me long term because I get stability in renters and better credit scores which translate in less risk.

Long story short, I trust the free market and aside from some very low competition fields, no one jacks up prices for fun. When they do, they end up in bankruptcy because it’s usually a race for market share which drives prices DOWN.

#15

Not sure if anyone has mentioned this, Trump needs to stick to this. Or China will call his bluff. Trump has a history of caving in.
For the short-term, we can take the hit. As for the long-term, that depends on Trump.

Asian markets are down 2% for Tuesday 's trading. At least, Monday’s bloodbath wasn’t as severe as some were expecting over the weekend.

We’ll see tomorrow how the severity of the China-US relation will copy Monday’s sell-off.

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#16

You know who thinks like that? People who’ve never been in business for themselves. They have some grand idea that everyone purchases everything at the same price. Walmart can sell a widget for $1.25 but if you charge $1.50 you must be “price gouging” or ripping people off".

Except that Walmart contracts to purchase 1 million widgets so their cost is .08 cents per widget.

A mom and pop store buys them 50 at a time so their cost is .75 per widget.

I’d like to tell people like this they are overpaid and have no right to ask for a raise because someone in Tennessee makes half of what they do in the same field.

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#17

Also to mention, China is in it for the long game. They can wait out Trump if he loses a second term and they can wait him out if he wins a second term.

All they need in office is another Obama and they can recoup their losses in no time.

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#18

I see it a little differently. There’s a fairly large middle class building in China. While you can’t make things much worse for the poor there, it would certainly impact the middle class by stopping trade with the US or even cutting it by 25%. I think the strategy here needs to be returning fairness in small steps because a popular revolt is a real possibility in China. To me, that means their hands are largely tied so we can’t push them too far but we can push a lot because again, their hands are tied. They’re in every bit as tight as a spot as we are. It’s a very complex issue but I think we have more power than we assume in the conversation. We have an office in Bejing and one in Yantai. It’s interesting to listen to the card carrying communists that work for us. They’re actually free market minded and really anti-big government. (At least the ones I work with) If they were all of the sudden without work in large numbers, the government there would have a huge problem on its hands and it knows that. JMO of course.

#19

People miss that stuff. I’ll purposely pay more at a mom and pop shop than Walmart just because I want those little guys to stay in business to give us SOME choice… might not be a great choice but I want someone there to keep the big guys in check. Without the little guys, pretty soon we’ll see the prices soaring and we’ll have no recourse. Competition is vital.

#20

And a good observation at that. :wink:

Part of where I am coming from is I’d like to see America back in manufacturing again.

I don’t think there is anything worse a country as self sufficient as we are, with the resources we have, to be caught in a situation where our dependence on other countries could cripple us. There is no reason for it.

So, make things a fair playing field. If steel costs X amount made in America, let it cost the same if imported, etc.

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