One can make an argument (although there may be a supply shortage), that suppliers are slow playing it to inflate prices.
Should Have Bought a Bronco
- Thread starter RPG9
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ganooch
Full Access Member
This makes no sense. The manufacturer doesn't make any money from the secondary market. If they want to make more money, they need to sell more trucks, period. Secondary flippers and dealer BS ADM fees don't help Ford in any way.
Demand = Price.
ganooch
Full Access Member
No. Demand does not equal price. At all. When the 4th of July rolls around and hot dogs sales go through the roof, is a pack of hot dogs more expensive than 3 months earlier? No, they are the same price, even though demand is greater.
Also, demand isn't even high in this situation, supply is low. There aren't more people all of a sudden that want Raptors, there is a scarcity of Raptors available.
Demand always equals price. This is a law of economics. What establishes demand is the customers willingness (for a lack of a better term) to pay for that item.
For instance, if you go to United Airlines and request a ticket to go to Greece the same day. They’ll quote you $2300. Why? The demand for that request is in fact higher than the typical request that is usually 3 weeks in advance. They know that you need it so they inflate the produce/service based on that need. I don’t see how there is anything to dispute here.
To answer your equation, I’d have to graph it, so that you can see there is in fact two curves that you are dealing with (a demand curve and a supply curve). One can be used to manipulate the other. If you slow down production (or supply) it’ll increase the value of an item (hence demand=price). What a customer is willing to pay is the demand in this case
ganooch
Full Access Member
Appreciate your input, but I have an MBA and understand supply and demand. No need to show me the graph that they teach you in basic economics. Willingness to pay is different from demand, although they are related.
You started this conversation by saying that suppliers are "slow playing it" to increase prices. Suppliers can only affect the supply side of the equation, yet you are trying to convince people that demand = price. I am having a hard time following your logic.
All of that said, I am not really willing to keep investing time in this conversation. I just have a problem when I see people posting something that is patently wrong, I have to set the record straight because I hate lazy generalizations. Carry on.
KevoUsmc
FRF Addict
You're both right. Technically demand is what the people are willing to pay (for example 15K ADM). But Ford didn't raise the MSRP of the Raptor to 85K that's just what the dealer can get away with in some cases.
I think what he was trying to say was the base prices haven't increased. The Xbox is still 499 even though demand is through the roof, but after the initial hype died down less people are now inclined to pay ridiculous prices and just wait to find one at retail
I think what he was trying to say was the base prices haven't increased. The Xbox is still 499 even though demand is through the roof, but after the initial hype died down less people are now inclined to pay ridiculous prices and just wait to find one at retail
Slowing down supply increases want for a product. Slowing the production increases inflation. Inflation is an increase in price. Price is what people pay. Therefore demand=price. This isn’t even arguable. Are you saying the laws of macroeconomics are wrong and you are right?
What do you think the diamond industry does? Think diamond are rare? Increasing prices generates more revenue for an industry.
I hear you brother, but he contradicted himself 3 times. First I’m wrong, then I’m right and then wrong again.
He doesn’t understand that the base price may in fact be the same, but the end consumer isn’t customer whom the manufacturer sold it to.
****, if price doesn’t equal demand, tell me why ************* were buying Lysol sprays for $90 a can this time last year. I wouldn’t trade one in for a bag of peanuts now.
He says he has a MBA degree (and congrats), but that isn’t a real argument.
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ganooch
Full Access Member
Lol, I am going to ignore this guy via his user profile. Someone tell me if he ever says anything factual or insightful. I would then be interested from hearing from him again.
