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Old 08-10-2018, 12:22 PM
 
17,750 posts, read 15,041,223 times
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Quote:
Originally Posted by tickyul View Post
Free markets, supply-demand............yes, I agree there is a lot more to it than that. Housing-markets are hugely manipulated by Fedgov and many other factors.

Well the real problem is in the classroom they will tell you that the quantity demand will fall as prices rise. That works that way with commodities on very long curves. However if it becomes a speculative vehicle, the rise in price can attract more speculators. So the very simple economic assertion is quite misleading.
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Old 08-10-2018, 12:44 PM
 
3,573 posts, read 2,007,237 times
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Understanding how it works conceptually but being able to apply it and model it is another thing.

A more asinine statement to me is "It is what it is".
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Old 08-10-2018, 01:11 PM
 
1,488 posts, read 334,628 times
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Quote:
Originally Posted by gwynedd1 View Post
Well the real problem is in the classroom they will tell you that the quantity demand will fall as prices rise. That works that way with commodities on very long curves. However if it becomes a speculative vehicle, the rise in price can attract more speculators. So the very simple economic assertion is quite misleading.
Knee jerk bandwagon behavior can supersede ivory tower logic. Curriculum economics, while likely correct in the classical sense, fails to account for impulsivity in consumers, FOMO, and other behaviors more likely found in the DSM than Econ books.
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Old 08-10-2018, 02:07 PM
 
2,360 posts, read 1,031,855 times
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Quote:
Originally Posted by tickyul View Post
Free markets, supply-demand............yes, I agree there is a lot more to it than that. Housing-markets are hugely manipulated by Fedgov and many other factors.
Yep, by demand prices that exceeds the real value of the home.

Market greed by owners and profiteers.
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Old 08-10-2018, 02:10 PM
 
Location: Ohio
18,053 posts, read 13,262,843 times
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Quote:
Originally Posted by ddm2k View Post
Don't you just hate when people keep saying this? There should be a fine assessed.
Why, because you don't understand it?

Quote:
Originally Posted by luv4horses View Post
The concept is so very old school and overly simplified as to be misleading. But it is a good way to out smart the rubes.
There's nothing old school about it. It affects every aspect of your life, whether you like it or not.

The average home sale price in Cincinnati is only $129,000 but then that's because Supply is actually a little higher than Demand. That's not true in other areas of the US, were there is a limited Supply of housing and Demand far exceeds the Supply, resulting home prices starting at $500,000 for a house that would probably sell for $32,000 in Cincinnati.

You pay higher food prices, because a large chunk of corn was diverted from consumer food products to the production of ethanol to mix with gasoline, and not only that, but your tax-dollars subsidize ethanol production, costing you even more.

A smarter way would have been to encourage farmers to use some of the several hundred Million acres of fallow farm land in the US to grow sugar beets, which are superior to corn in ethanol yield (almost twice the yield of corn).

Your food supply would not have been impacted, and food prices would not have risen so fast.
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Old 08-10-2018, 02:22 PM
 
1,488 posts, read 334,628 times
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Quote:
Originally Posted by Mircea View Post
A smarter way would have been to encourage farmers to use some of the several hundred Million acres of fallow farm land in the US to grow sugar beets
I may have a lead for you... his name is Dwight Schrute. His grandfather left him a 60-acre working beet farm. He is interested in growing his operation.
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Old 08-10-2018, 02:23 PM
 
1,488 posts, read 334,628 times
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Quote:
Originally Posted by Mircea View Post
Why, because you don't understand it?
Strike 1: Red herring
Strike 2: Projection
Strike 3: Trolling

Case closed.
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Old 08-10-2018, 07:26 PM
 
Location: Holly Neighborhood, AUSTINtx
3,458 posts, read 5,096,843 times
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I’m starting to wonder if it isn’t supply and demand that some people here don’t like to acknowledge or more the fact that pricing is the mechanism - versus say a lottery - that decides who can purchase what. I. E. This is a class resentment (aka jealousy) issue more than an issue with basic economic theory.

I will concede one point that real estate markets function differently than say potato markets, but of course one is a renewable resource and one is finite so this should be expected.
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Old 08-10-2018, 07:34 PM
 
Location: Holly Neighborhood, AUSTINtx
3,458 posts, read 5,096,843 times
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Quote:
Originally Posted by hitpausebutton2 View Post
Yep, by demand prices that exceeds the real value of the home.

Market greed by owners and profiteers.
Sorry the price a buyer is willing to pay is the value of a home. You are confusing what you personally would pay for a particular home and assuming no one should pay more than that. You are inserting your own personal preferences and budget limitations into a decision that you are not a party to. The fact that I would not pay extra for a home on a corner lot does not mean others will not and there are hundreds of other examples I could bring up.
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Old 08-10-2018, 07:59 PM
 
3,484 posts, read 1,990,917 times
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I work in a hotel.

Illustrated, yet most still don't understand supply/demand when they pay the bill.

Average room rate is $125/night during weekday nites. Supply ( number of rooms available) is higher, demand is lower. Price is lower.

Average room rate friday and saturday nites: average $165.00/nite; demand is higher due to weekend travelers who stay Friday and Saturday nites, so supply is tight and lower, so price goes up.

Average room rate when an event is taking place and there isn't a room available in a 50 mile radius: average $275.00/nite. Supply :none, demand: extremely high, price goes way up.

Simple to see. (Should be) easy to understand.

People still grumble under their breath, or out loud when they cough up the money to pay the bill.

What gets complicated is:

They think it's greed, but when the hotel is completely booked, or now with so many third party options for booking that overbooking happens, supply is non-existent. So price is high. It actually could be higher.

Of course, they also figure it should be $25/nite average on week day nites when there are some empty rooms.
Enter then, into the mix, the basic cost to offer such rooms, as setting the price, even with vacancies. So on weekday nites it is really cost-driven pricing that sets a basic price, for cost plus appropriate profit margin.
Reenter demand. Because demand is higher than giving rooms away, price is stable at the $125/nite rate.

Enter also in, the business man or company that fill a a room or rooms every weeknite, guaranteeing a certain profitable price point at $85/nite for 4 nites per week, every week of the year, including the event weeks ( if such rates are allowed during events at the bargained rate.)

But that price point IS, however, accounted in the weeknite AVERAGE rate.

Supply and demand is simple, but often the waters are muddied by other factors affecting supply and demand...

Thats where people have misunderstandings of the basis of supply/demand.

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