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Friday Fun Thread for March 22, 2024

Be advised: this thread is not for serious in-depth discussion of weighty topics (we have a link for that), this thread is not for anything Culture War related. This thread is for Fun. You got jokes? Share 'em. You got silly questions? Ask 'em.

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It’s an entrenched mythology of capitalism that companies lower prices based on competition. This hardly ever works in the real world

Huh? Then why have the prices of wood, steel, food, electricity, computing power, plastic, televisions, phones, and literally every material good ever declined by orders of magnitude over the past four centuries? When we observe any specific one, what we see is that new, more efficient or productive techniques enter the market at lower prices and drive out higher priced competitors, over and over. What am I missing?

I think you could get there from a normal supply/demand relation, since efficiency raises supply?

There’s probably a labor theory of value explanation, too. It’d be funny if coffee was taking the Marxist tack.

I think you could get there from a normal supply/demand relation, since efficiency raises supply?

Monopolists don't set prices to where supply = demand, they set prices to maximize their own profit, and there's deadweight loss because of the mismatch. But, yeah, prices would still decrease as efficiency increased. I think it gets weird when there are very large price differences involved and it'd depend on what the demand curve looks like exactly. My argument is more that we can observe competition driving the price decreases of all those specific goods historically.