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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: SilentZ who wrote (228383)	4/8/2005 8:42:34 PM
From: TimF	Read Replies (1) \| Respond to of 1578646

Dude, a perfect market model assumes that businesses can't pull the wool over the eyes of consumers. "A perfect model" rarely happens in social, political, or economic relationships. The real world is more complex than that. But unless by "pulling the wool over the eyes of consumers" you mean outright fraud (selling regular as premium, or selling .9 gallons as 1 gallon would be a couple of possible examples) than the basic ideas behind the model apply. If I am in the habit of selling something and all the sudden I realize the market will support a higher price than I have been charging, then I don't even have to know the reason myself. I'll just start charging more. If the demand goes away at that new price then I have to cut my prices, or perhaps sell less, or leave the market entirely. I did not believe that the oil men in office would act in their own personal interest against the interest of the people. God, I feel naive now. Unless there selling you something other than what you are told you are getting, or arguably unless they are price-fixing than charging what the market will bear is in the long term interest of the people. If prices are artificially limited, even by a false sense of generosity by the sellers, than you will have shortages. Remember the gasoline lines? We don't have them now because we don't have artificial restrictions on prices. If supply goes down or demand goes up then the prices go up. If you don't allow the price to increase in response to shifts in supply and demand, then the incentive to consume will be artificially high and the incentive to produce will be artificially low. Tim