The Collapsing American Middle Class

[Divine Wind]

More bloviating.

And you are very good at it! Kudos.

 

[kaz]

Yes, and I constantly inform one percenter of that. He claims to make $4.6 million a year and yet he doesn't know shit about business

Not saying this is him, but people like Paris Hilton are the dumbasses living off of daddy's wealth. I'm sure she "makes" at least $4.6M/YR in dividends. Another reason to revisit the inheritance issue.

Why don't you morons try refuting my post instead of stroking each other. You're making Gay look bad....

Yes, only leftists are allowed to agree on message boards. What a dick

 

[OnePercenter]

It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.
-- Murray N. Rothbard​

Dunce. Name one monopoly today.

Walmart.

Walmart is not a monopoly.

Walmart is a monopolistic competitor that competes basically on price. Essentially, any seller who offers a branded product is a monopolistic competitor in the market where that product is bought and sold. With regard to goods that only Walmart offers, Walmart has a monopoly. (McDonald's is also a monopolistic competitor. McDonald's has a monopoly in McDonald's burgers, McDonald's fries, McDonalds coffee, etc.....I'd have used Walmart brands, but I don't know what Walmart's in-house brands are.)

Walmart isn't a monopoly, but it is large enough that other retailers have had to change their labor and hiring practices to stay competitive. Walmart's policies have lead to a decline in the wages paid to retail workers across the board, in the US.

Red:
And what exactly would the changes be?

That's not what actual or potential competitors with Walmart do. They don't because while doing so may yield marginal decreases in their wage expense (non-COGS because we are talking about retailers not manufacturers), those reductions aren't great enough to compensate for insufficient net revenue and inadequate profit margins that result in insufficient cash flows.

What they do is flex their product mix (goods offerings and intangible offerings) in order to minimize the instances of purely price-based competition of competition.

• If they are similarly sized to Walmart:
  • Seek comparable price concessions from suppliers to "level the playing field" in the price dimension
  • Where possible, offer products that consumers will not consider as perfect substitutes for those offered at lower prices by Walmart.
  • Compensate for their inability to secure equally low unit prices by reducing infrastructure (fixed asset) costs and offering proportionally comparable prices via higher quantity unit sales (e.g., $0.79 per box of rice, but the retail consumer must buy four boxes of rice -- spending $3.16 -- rather than the one box they can buy for $0.79 at Walmart). (a la Costco, Sam's Club, BJ's, et al -- essentially they offer manufacturers and distributors inventory turns comparable to what Walmart can, but they can only do so by agreeing to buy larger unit sizes. Walmart buys huge quantities of small unit sizes.)
  • Employ emotional marketing techniques to reduce consumers' price sensitivity (i.e., increase consumers' coefficient of elasticity to "1" or higher) with regard to goods that consumers see as close substitutes.
• If they are materially smaller than Walmart:
  • Offer products that Walmart does not. They do this because they cannot compete on price if they find themselves selling an identical product or a sufficiently close substitute (i.e. consumers have a lower than "1" coefficient of elasticity) to one that Walmart sells. Thus they opt to sell something Walmart does not sell. (Remember, Walmart is a monopolistic competitor not a "perfect competitor;" they sell differentiated goods not commodity goods. That means that the "something", the product, is not wine, but rather "Kendall Jackson wine" and "Rodney Strong wine" and "Stag's Leap wine" and so on. The "something" would be "wine," or maybe "red wine" and "white wine," in a commoditized selling/buying market.)
    
    For example, most consumers' behavior likely shows they consider Lee and Wrangler jeans to be close enough in "whatever characteristics matter" that if one is notably less pricey than the other, they will buy the lower priced pair. In contrast, most consumers behavior likely shows they do not consider Lee or Wrangler jeans to be close substitutes for, say, True Religion jeans. Accordingly, they will buy either Lee/Wrangler jeans or they will buy True Religion jeans, and the price differential doesn't factor into the decision.
    • Those two consumer behavior patterns tell us several things:
      • Lee and Wrangler jeans are subject to low elasticity of demand with regard to one another.
      • True Religion jeans enjoy high elasticity of demand compared to Lee/Wrangler jeans, that is, consumers place a higher value on something other than price in deciding to buy True Religion jeans rather than Lee/Wrangler jeans.
    • Those same patterns tell us nothing about the independent price elasticity of demand of Lee, Wrangler or True Religion jeans.
      • We don't know from the above whether a change in TR jeans will or won't make consumers who were predisposed to buy TR jeans actually buy more TR jeans.
      • We don't know if the a change in Wrangler/Lee jeans price will motivate more or fewer sales of Lee/Wrangler jeans to consumers who were already going to buy Lee/Wrangler jeans.
  • Offer some intangible that is part of the customer's buying experience and that they value more than the lower price Walmart offers. This usually entails service or store atmosphere "superiority" over Walmart.

A monopoly is a market situation in which a single supplier makes an entire industry for a good or service.

Walmart is the largest supplier of retail company in the world. If you want to sell at Walmart, Walmart will dictate everything, INCLUDING how much they will pay you for your product. Monopoly.

1. Monopoly is not a market situation; it is a market structure. Market structure is part of a market situation; it is not the market situation.
2. Monopoly is a market structure characterized by a single seller of a unique product with no close substitutes. This is one of four basic market structures. The other three are perfect competition, oligopoly, and monopolistic competition. As the single seller of a unique good with no close substitutes, a monopoly has no competition.
   
   Walmart is not a monopoly. It is a monopolistic competitor. (see above)

Airospace Boeing.
Software. Microsoft.
Both of them dictate to their suppliers the exact same way WalMart does and price to the customers the exact same way.

You're trying to compare end-users with retail?

That is not at all the nature of the mistake the other poster made. The error s/he made is failure to recognize the distinction between oligopoly and monopolistic competition.

It's not cool to not know what you're talking about.
-- Barrack Obama​

LOL

 

[320 Years of History]

It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.
-- Murray N. Rothbard​

Dunce. Name one monopoly today.

Walmart.

Walmart is not a monopoly.

Walmart is a monopolistic competitor that competes basically on price. Essentially, any seller who offers a branded product is a monopolistic competitor in the market where that product is bought and sold. With regard to goods that only Walmart offers, Walmart has a monopoly. (McDonald's is also a monopolistic competitor. McDonald's has a monopoly in McDonald's burgers, McDonald's fries, McDonalds coffee, etc.....I'd have used Walmart brands, but I don't know what Walmart's in-house brands are.)

Walmart isn't a monopoly, but it is large enough that other retailers have had to change their labor and hiring practices to stay competitive. Walmart's policies have lead to a decline in the wages paid to retail workers across the board, in the US.

Red:
And what exactly would the changes be?

That's not what actual or potential competitors with Walmart do. They don't because while doing so may yield marginal decreases in their wage expense (non-COGS because we are talking about retailers not manufacturers), those reductions aren't great enough to compensate for insufficient net revenue and inadequate profit margins that result in insufficient cash flows.

What they do is flex their product mix (goods offerings and intangible offerings) in order to minimize the instances of purely price-based competition of competition.

• If they are similarly sized to Walmart:
  • Seek comparable price concessions from suppliers to "level the playing field" in the price dimension
  • Where possible, offer products that consumers will not consider as perfect substitutes for those offered at lower prices by Walmart.
  • Compensate for their inability to secure equally low unit prices by reducing infrastructure (fixed asset) costs and offering proportionally comparable prices via higher quantity unit sales (e.g., $0.79 per box of rice, but the retail consumer must buy four boxes of rice -- spending $3.16 -- rather than the one box they can buy for $0.79 at Walmart). (a la Costco, Sam's Club, BJ's, et al -- essentially they offer manufacturers and distributors inventory turns comparable to what Walmart can, but they can only do so by agreeing to buy larger unit sizes. Walmart buys huge quantities of small unit sizes.)
  • Employ emotional marketing techniques to reduce consumers' price sensitivity (i.e., increase consumers' coefficient of elasticity to "1" or higher) with regard to goods that consumers see as close substitutes.
• If they are materially smaller than Walmart:
  • Offer products that Walmart does not. They do this because they cannot compete on price if they find themselves selling an identical product or a sufficiently close substitute (i.e. consumers have a lower than "1" coefficient of elasticity) to one that Walmart sells. Thus they opt to sell something Walmart does not sell. (Remember, Walmart is a monopolistic competitor not a "perfect competitor;" they sell differentiated goods not commodity goods. That means that the "something", the product, is not wine, but rather "Kendall Jackson wine" and "Rodney Strong wine" and "Stag's Leap wine" and so on. The "something" would be "wine," or maybe "red wine" and "white wine," in a commoditized selling/buying market.)
    
    For example, most consumers' behavior likely shows they consider Lee and Wrangler jeans to be close enough in "whatever characteristics matter" that if one is notably less pricey than the other, they will buy the lower priced pair. In contrast, most consumers behavior likely shows they do not consider Lee or Wrangler jeans to be close substitutes for, say, True Religion jeans. Accordingly, they will buy either Lee/Wrangler jeans or they will buy True Religion jeans, and the price differential doesn't factor into the decision.
    • Those two consumer behavior patterns tell us several things:
      • Lee and Wrangler jeans are subject to low elasticity of demand with regard to one another.
      • True Religion jeans enjoy high elasticity of demand compared to Lee/Wrangler jeans, that is, consumers place a higher value on something other than price in deciding to buy True Religion jeans rather than Lee/Wrangler jeans.
    • Those same patterns tell us nothing about the independent price elasticity of demand of Lee, Wrangler or True Religion jeans.
      • We don't know from the above whether a change in TR jeans will or won't make consumers who were predisposed to buy TR jeans actually buy more TR jeans.
      • We don't know if the a change in Wrangler/Lee jeans price will motivate more or fewer sales of Lee/Wrangler jeans to consumers who were already going to buy Lee/Wrangler jeans.
  • Offer some intangible that is part of the customer's buying experience and that they value more than the lower price Walmart offers. This usually entails service or store atmosphere "superiority" over Walmart.

A monopoly is a market situation in which a single supplier makes an entire industry for a good or service.

Walmart is the largest supplier of retail company in the world. If you want to sell at Walmart, Walmart will dictate everything, INCLUDING how much they will pay you for your product. Monopoly.

1. Monopoly is not a market situation; it is a market structure. Market structure is part of a market situation; it is not the market situation.
2. Monopoly is a market structure characterized by a single seller of a unique product with no close substitutes. This is one of four basic market structures. The other three are perfect competition, oligopoly, and monopolistic competition. As the single seller of a unique good with no close substitutes, a monopoly has no competition.
   
   Walmart is not a monopoly. It is a monopolistic competitor. (see above)

Airospace Boeing.
Software. Microsoft.
Both of them dictate to their suppliers the exact same way WalMart does and price to the customers the exact same way.

You're trying to compare end-users with retail?

That is not at all the nature of the mistake the other poster made. The error s/he made is failure to recognize the distinction between oligopoly and monopolistic competition.

It's not cool to not know what you're talking about.
-- Barrack Obama​

LOL

LOL