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Price gouging
(i.ibb.co)
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this post was submitted on 07 Jun 2024
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I mean isn‘t what‘s described here also just basic supply/demand?
Unfortunately, the demand for things like food doesn’t go down just because you don’t have money
Exactly! In economics there's a concept called price elasticity (Incorporating two related principles, elasticity of supply and elasticity of demand).
Elasticity of demand is the more relevant one here. Products with elastic demand are those that consumers are quicker to change their buying habits around. For instance, luxury items. Products with inelastic demand are generally actual necessities (like groceries), where you're gonna have to buy them one way or another. You can look to alternate suppliers with better prices, but when they're all gouging you have no choice but to buy from one of them.
In the long run this can indirectly be forced to change. If it gets bad enough that people en-mass started growing their own food at home, this could cause the suppliers to reconsider their prices. (I know that's a far-fetched example. I'm just using it to broadly illustrate my point.)
Fortunately there’s enough competition in our food market that food is abundant and cheap. We haven’t had any well-intentioned food redistribution schemes to screw up our market in a long time, so we have a very healthy food market that’s doing a great job of feeding everyone.
Sure, at the basic level, everyone needs food. But you can get a lot more granular about it. For example, a lot of people buy things they may not need to survive, like snacks/desserts. Or perhaps they do buy items they need, but they usually get versions that cost more (whether that be because the particular store is more expensive overall, or simply because they’re buying items that are more costly than things at the lowest end that still allow you to survive like beans and rice).
The point is, most (not ALL) people can buckle down their food spending in some way or another, and I think that’s what we’re seeing here.
What's your argument here? That we should sacrifice in the name of corporate profits?
I personally am not interested in giving up the few luxury food items I buy so that the CEO of Kroger can buy another fucking yacht.
edit: I meant to say I'm not interested in paying more for less so they can keep buying yachts, but did a terrible job of that and ended up saying the opposite.
When consumers buy less, companies make less money.
There’s no mechanism here where people buying less luxury foods leads to anyone buying yachts. That’s just not a thing in this model and I’m not sure where you got that.
That's... not what I said at all. In fact, the opposite.
edit: You're right, that is what I said. Not what I meant to say though. I 'mistyped'. Hence why it doesn't make sense. Sorry.
Have you tried eating dog food to help the shareholders yet?
Yeah, but I balance it out by feeding my dog avocado toast.
This reminds me. I'm out of fresh fish for the dog.
Kibble only. If they catch you with some of that fancy wet dog food you're going to get a lengthy lecture about financial responsibility.
I’m not saying that, I’m going back and saying it IS a sort of supply and demand effect we’re seeing. People aren’t spending in ways the corporations wanted, so now they’re finally lowering some prices. That’s all.
People will do anything to avoid admitting that the free market is working as intended here
It sounds like you're blaming the consumer. As if we could avoid the current cost of living crisis if we just buckled down our spending.
I’m not blaming anyone but the corporations here. My post was simply an observation of what’s happened, but for some reason people are taking it wrong I think.
Using words to follow reality is a threat to many people’s way of thinking because they want their philosophy to remain unchanged, and new information has the possibility of changing their philosophy.
This is why there is often a visceral rejection of someone who just tells the truth
Yeah… People just need to start slurping down gruel for every meal and be happy about it. How dare someone complain about grocery store prices when I know for a fact they splurged on a bag of name brand potato chips last week! The poors are not just entitled but completely irresponsible. Don’t they realize simple luxuries like snacks are for rich people?
That's what a lot of people here and on reddit tell you when you say it's expensive to cook. Rice and beans, rice and beans, eat your rice and beans every day.
Thanks, I enjoy some occasional rice and beans, but I prefer having a will to live over eating beans every day.
You are not brasilian
I think you misinterpreted what I wrote? I’m not saying people SHOULD reduce their food spending, i’m saying they’ve been kind of forced to, and so in effect that’s why prices are going down. So it IS a supply and demand effect of some kind.
That's not at all what they said
I was going to say the same. Of course there is always a base demand, but there is a reason why 300 years ago fat people were considered wealthy simply because they could buy whatever they wanted for food.
But this discussion is all besides the point. The post says „as soon as we stop buying shit prices go down“, and that is a simple principle of supply demand. I also never stated that this was the sole reason for massively inflated prices, because it‘s not. Again, i was just referring to a thing that was said in the post itself.
The community on here isn‘t really better than on reddit, it‘s all an echochamber as well, which i‘m fine with.
It is. It's partly walking back price gouging (which happened because there was no government there to stop them) and partly a correction for the loss in buying power overly greedy price gouging during high inflation has caused.
No, it's greed. They aren't hurting for supply, so there's no other reason to raise costs other than greed.
But the post says „they stopped buying and price goes down“ reduced demand makes price go down. I‘m not defending corpos or claiming that they‘re not greedy. I‘m just discussing what is stated in this post because it‘s a bad example of greed.
"Supply and demand" refers to the two-way street of scarcity wherein the less "supply" there is, and the more "demand" for the product, the higher the price will be. The point is, if you want to attribute it to "supply and demand", you need both ends - the scarcity of supply, and a rise in demand. If you have one or the other, but not both, and prices increase, it's due to other causes.
Attributing price changes to "supply and demand" doesn't mean it's being attributed to both (ie supply changes and demand changes), simply that there is now a mismatch between the two
In this case, if supply remains the same, but demand decreases, then the price will go down until they are in equilibrium again
In a terrarium economy. We're so divorced from actual value this econ 101 stuff barely applies to late stage capitalism.
Yeah we had a temporary scarcity of supply as global production dropped as a result of our attempt to put the economy into a medically induced coma in 2020.
I mean, we also had a massive decrease in competition as a result of that same economic policy. So companies have been more able to step away from the supply and demand curves in terms of pricing, because the natural market got screwed up.
Yeah, lowering prices by itself isn't evidence that it was just greed all along, they conceivably could be lowering prices to the point that sales on those items are no longer profitable in order to shed inventory because some money (at a loss) is better than no money (at an even bigger loss)
It absolutely is. Which is why the prices of necessities such as food, electricity, water, housing, basic clothing, healthcare and education shouldn't be up to supply and demand to decide.
It is. Everybody’s been mis-educated about what free markets are (I think a lot of them actually believe the term means “The market is free to hurt people”), so we get to pretend like we’re discovering basic economics again.