Monday, March 25, 2013

Different rules

Interesting that after a major disaster, when gasoline and water and ice and food is in short supply, the local and state governments step in and put forth laws governing the pricing of such items, even though their scarcity and demand should be reflected in the price......

And as market rules would dictate, when pricing goes up, people buy less of that item, or don't buy any more than they need... Those who choose to hoard right now pay a higher price for a scarce item.

Yet no one but the market and the supply chain is regulating (or not) the price and availability of ammunition.

Strangely, the market is doing exactly what the formulae would suggest....or at least it reflects what I learned in my economics classes so long ago....Increased demand and a (relatively) inelastic supply leads to higher pricing...People buy less, or only as much as they need.

1 comment:

A SImple Man said...

And when the buying slows due to the high prices supply will increase and cause prices to drop.