What "Supply and Demand" have to do with "Capitalism":

[william the wie]

we have one Insurer in maine who owns 87% of the health insurance policies within the state....

In articles that I had read on the topic, and heard on the evening news, they spoke of this company as a Monopoly and they said that some gvt entity considered owning something like 70% of the market place was considered a monopoly or rather has the same negative effects as a monopoly....

carry on guys, i just wanted to add my simplistic 2 cents.

Health Insurance is regulated by the state, sounds like state officials picking up pin money to me.

 

[Flopper]

By definition, if a company has any competition, it is not a monopoly.

According to a strict academic definition, a monopoly is a market containing a single firm. Thus, the existence of a second firm within the market, no matter how small or insignificant would preclude the existence of a monopoly. If this is what you mean, you are probably correct. However, the more accepted use of the term monopoly is control of all or nearly all of a market. This is how courts view a monopoly and this why the Supreme Court broke up Standard Oil.

The courts follow the law, which is written in such a way that it is possible to define a company with a market share of less than 50% as a monopoly, which is why the FCC wanted to step in and prevent the AT&T/T-Mobile deal.

AT&T, T-Mobile, Sprint, and Verizon constitute the American national cell phone carrier market. T-Mobile's days are number as are Sprint. Due to coverage gaps, for many people there is no choice now.

 

[Quantum Windbag]

we have one Insurer in maine who owns 87% of the health insurance policies within the state....

In articles that I had read on the topic, and heard on the evening news, they spoke of this company as a Monopoly and they said that some gvt entity considered owning something like 70% of the market place was considered a monopoly or rather has the same negative effects as a monopoly....

carry on guys, i just wanted to add my simplistic 2 cents.

Those are created by government regulations.

 

[Quantum Windbag]

According to a strict academic definition, a monopoly is a market containing a single firm. Thus, the existence of a second firm within the market, no matter how small or insignificant would preclude the existence of a monopoly. If this is what you mean, you are probably correct. However, the more accepted use of the term monopoly is control of all or nearly all of a market. This is how courts view a monopoly and this why the Supreme Court broke up Standard Oil.

The courts follow the law, which is written in such a way that it is possible to define a company with a market share of less than 50% as a monopoly, which is why the FCC wanted to step in and prevent the AT&T/T-Mobile deal.

AT&T, T-Mobile, Sprint, and Verizon constitute the American national cell phone carrier market. T-Mobile's days are number as are Sprint. Due to coverage gaps, for many people there is no choice now.

The funny thing is that almost 90% of Americans can choose between at least 5 different cell phone companies, most of which beat T-Mobile's so called discount rates.

 

[Flopper]

The courts follow the law, which is written in such a way that it is possible to define a company with a market share of less than 50% as a monopoly, which is why the FCC wanted to step in and prevent the AT&T/T-Mobile deal.

AT&T, T-Mobile, Sprint, and Verizon constitute the American national cell phone carrier market. T-Mobile's days are number as are Sprint. Due to coverage gaps, for many people there is no choice now.

The funny thing is that almost 90% of Americans can choose between at least 5 different cell phone companies, most of which beat T-Mobile's so called discount rates.

Actually there are four companies Verizon, AT&T, Sprint, and T-Mobile that garner 92% of cell phone business. The remaining 8% are either region companies and no contract companies which depend on the the big 4, which may become the big 3. Without federal intervention, there is no doubt there would be a merger of Verizon and Sprint which would eventually merge with AT&T to form a single cell phone provider which would control the market.

http://www.advancedtele.com/blog/2011/09/subscribers-cell-phone-service/

 

[Quantum Windbag]

AT&T, T-Mobile, Sprint, and Verizon constitute the American national cell phone carrier market. T-Mobile's days are number as are Sprint. Due to coverage gaps, for many people there is no choice now.

The funny thing is that almost 90% of Americans can choose between at least 5 different cell phone companies, most of which beat T-Mobile's so called discount rates.

Actually there are four companies Verizon, AT&T, Sprint, and T-Mobile that garner 92% of cell phone business. The remaining 8% are either region companies and no contract companies which depend on the the big 4, which may become the big 3. Without federal intervention, there is no doubt there would be a merger of Verizon and Sprint which would eventually merge with AT&T to form a single cell phone provider which would control the market.

Verizon Leads in USA Market Share for Cell Phone Service | Advanced Telecom Services

No, there are 4 national companies that garner 92% of the cell phone business.

 

[rdean]

When you say can you explain specifically what you are proposing? What is your plan?

Because the right wing has no plan. That's why they work on "anti abortion, and anti gay rights, make English the national language, get rid of fluoride and so on".

Did you miss that part listed above? It's pretty damn specific, wouldn't you say?

Plan? I thought you said we do "Schemes"?

You do. That's why I said you guys had no plan.

 

[Richard-H]

The "Supply vs. Demand" theory (taught to everyone in their high school economics class), is FALSE.

Like most classroom theories it's concieved in a theoretical vacuum - it ignores all other influences.

The fundamental error in the supply vs. demand relationship is that it assumes that everyone has a roughly equal income. It's a bidding system where those who need and/or want a product more will bid more. This is balanced against the the supply-side where production, shipping and all other 'costs-of-business' require that a supplier set the price at some 'sweet-spot' to maximize profit. He must sell nearly all his goods.

But what happens when a society is divided economically? When there is a grossly unequal wealth distribution?

Suddenlt the demand side changes - those who have high incomes are willing to pay extreme prices - often times not based on need or strong want, but on a whim.

This creates an environment where producers get more profit per unit sale thereby indicing them to produce much less - reducing the costs of production.

This in turn leaves the low income people out in the cold - many of whom need or have a generally strong want for the product.

Now, if the class of people who control production are the same people who have high incomes, the result is an economy divided into two separate economic systems.

This is what we are experiencing today. One economy for the wealthy, the corporations and the government...who can and will pay ridiculous prices for everything and a second economy for everyone else.

Increasingly "everyone else" is being squeezed out of the top level economy - a separate economy for the common people. One that is becoming increasingly impoverished.

 

[Wiseacre]

The "Supply vs. Demand" theory (taught to everyone in their high school economics class), is FALSE.

Like most classroom theories it's concieved in a theoretical vacuum - it ignores all other influences.

The fundamental error in the supply vs. demand relationship is that it assumes that everyone has a roughly equal income. It's a bidding system where those who need and/or want a product more will bid more. This is balanced against the the supply-side where production, shipping and all other 'costs-of-business' require that a supplier set the price at some 'sweet-spot' to maximize profit. He must sell nearly all his goods.

But what happens when a society is divided economically? When there is a grossly unequal wealth distribution?

Suddenlt the demand side changes - those who have high incomes are willing to pay extreme prices - often times not based on need or strong want, but on a whim.

This creates an environment where producers get more profit per unit sale thereby indicing them to produce much less - reducing the costs of production.

This in turn leaves the low income people out in the cold - many of whom need or have a generally strong want for the product.

Now, if the class of people who control production are the same people who have high incomes, the result is an economy divided into two separate economic systems.

This is what we are experiencing today. One economy for the wealthy, the corporations and the government...who can and will pay ridiculous prices for everything and a second economy for everyone else.

Increasingly "everyone else" is being squeezed out of the top level economy - a separate economy for the common people. One that is becoming increasingly impoverished.

Hard to know where to start here, I disagree with virtually everything you posit. We don't have 2 separate economic systems, producers will produce and sell as many units as possbile to maximize profits, regardless of whether it's yachts or yahtzee. When the point is reached where producing more units become unprofitable, they stop. Producers are constantly searching for ways to cut costs or improve productivity, or improve quality, or in some way sell more products. To the extent they are successful in their efforts we are all better off.

You think the sme people who control production are the rich; nonsense, the people who ultimately control production are the consumers, their decisions for what to buy or not buy are the sole drivers for what gets produced. To do otherwise is to invite less profitability, you won't find many businesses who are willing to do that so the less well off will suffer or become more impoverished.

 

[Flopper]

The "Supply vs. Demand" theory (taught to everyone in their high school economics class), is FALSE.

Like most classroom theories it's concieved in a theoretical vacuum - it ignores all other influences.

The fundamental error in the supply vs. demand relationship is that it assumes that everyone has a roughly equal income. It's a bidding system where those who need and/or want a product more will bid more. This is balanced against the the supply-side where production, shipping and all other 'costs-of-business' require that a supplier set the price at some 'sweet-spot' to maximize profit. He must sell nearly all his goods.

But what happens when a society is divided economically? When there is a grossly unequal wealth distribution?

Suddenlt the demand side changes - those who have high incomes are willing to pay extreme prices - often times not based on need or strong want, but on a whim.

This creates an environment where producers get more profit per unit sale thereby indicing them to produce much less - reducing the costs of production.

This in turn leaves the low income people out in the cold - many of whom need or have a generally strong want for the product.

Now, if the class of people who control production are the same people who have high incomes, the result is an economy divided into two separate economic systems.

This is what we are experiencing today. One economy for the wealthy, the corporations and the government...who can and will pay ridiculous prices for everything and a second economy for everyone else.

Increasingly "everyone else" is being squeezed out of the top level economy - a separate economy for the common people. One that is becoming increasingly impoverished.

Hard to know where to start here, I disagree with virtually everything you posit. We don't have 2 separate economic systems, producers will produce and sell as many units as possbile to maximize profits, regardless of whether it's yachts or yahtzee. When the point is reached where producing more units become unprofitable, they stop. Producers are constantly searching for ways to cut costs or improve productivity, or improve quality, or in some way sell more products. To the extent they are successful in their efforts we are all better off.

You think the sme people who control production are the rich; nonsense, the people who ultimately control production are the consumers, their decisions for what to buy or not buy are the sole drivers for what gets produced. To do otherwise is to invite less profitability, you won't find many businesses who are willing to do that so the less well off will suffer or become more impoverished.

As long as you are describing a free market the customer does ultimately control production. However, when one supplier controls all or nearly all of a market, that supplier can control price and thus control supply.

 

[Wiseacre]

The "Supply vs. Demand" theory (taught to everyone in their high school economics class), is FALSE.

Like most classroom theories it's concieved in a theoretical vacuum - it ignores all other influences.

The fundamental error in the supply vs. demand relationship is that it assumes that everyone has a roughly equal income. It's a bidding system where those who need and/or want a product more will bid more. This is balanced against the the supply-side where production, shipping and all other 'costs-of-business' require that a supplier set the price at some 'sweet-spot' to maximize profit. He must sell nearly all his goods.

But what happens when a society is divided economically? When there is a grossly unequal wealth distribution?

Suddenlt the demand side changes - those who have high incomes are willing to pay extreme prices - often times not based on need or strong want, but on a whim.

This creates an environment where producers get more profit per unit sale thereby indicing them to produce much less - reducing the costs of production.

This in turn leaves the low income people out in the cold - many of whom need or have a generally strong want for the product.

Now, if the class of people who control production are the same people who have high incomes, the result is an economy divided into two separate economic systems.

This is what we are experiencing today. One economy for the wealthy, the corporations and the government...who can and will pay ridiculous prices for everything and a second economy for everyone else.

Increasingly "everyone else" is being squeezed out of the top level economy - a separate economy for the common people. One that is becoming increasingly impoverished.

Hard to know where to start here, I disagree with virtually everything you posit. We don't have 2 separate economic systems, producers will produce and sell as many units as possbile to maximize profits, regardless of whether it's yachts or yahtzee. When the point is reached where producing more units become unprofitable, they stop. Producers are constantly searching for ways to cut costs or improve productivity, or improve quality, or in some way sell more products. To the extent they are successful in their efforts we are all better off.

You think the sme people who control production are the rich; nonsense, the people who ultimately control production are the consumers, their decisions for what to buy or not buy are the sole drivers for what gets produced. To do otherwise is to invite less profitability, you won't find many businesses who are willing to do that so the less well off will suffer or become more impoverished.

As long as you are describing a free market the customer does ultimately control production. However, when one supplier controls all or nearly all of a market, that supplier can control price and thus control supply.

But the supplier cannot control demand, and anyway how many cases do you know of where such a condition exists? To the point where lower incomes are denied access to a service or product? That would I think be zero.

 

[Bern80]

Features of capitalism
In a capitalist system private households need goods. They buy these goods from the income that they have. Some households have more income than others. Sometimes only one member of a household has a job, at other times both husband and wife go to work. Then they have more money to buy goods. This is the demand side of the economy.

On the other side companies and businesses offer private households goods and services. They produce the goods that they think consumers will want to buy. To do this they need workers to produce these goods and services. This is the supply side of the economy.

Companies and households get together at markets. Here they exchange goods, services and jobs (labour). A market is a place where people buy and sell things. In a capitalist society the prices of goods, services and labour are determined by supply and demand. If a lot of people want to buy a certain product its price will go up. Products that are mass produced usually have low prices.

Capitalism | How governments regulate the economy | Supply and Demand | History of Capitalism

English-Online
Articles in Easy, Understandable English for Learners

I found this especially for "anti science" and "anti education" USMB Republicans who don't believe that anyone who says "Supply and Demand" understands "Capitalism".

I really believe they are worth "salvaging". They just need a little education and then their positions can possibly become "coherent".

This is why their saying, "Corporations make jobs" is retarded. Without "demand", corporations won't make jobs. They are not charities. When people don't have money, there is no demand, which means "no jobs". There has to be a "demand".

This is why we need to rebuild America. Rebuilding America's infrastructure will also rebuild America's economy. Why? Because people will have jobs. That means they will have disposable income. That means "demand". THEN comes "supply". A rebuilt infrastructure will generate even more jobs. Corporations are attracted to easy and inexpensive transportation, electricity, roads and bridges. Yes Virginia, it's just that simple and that's how it really works in real life.

Agreed. Which is why you should be figuring how to put money back into people's pockets instead of taxing them more.

 

[CrusaderFrank]

Because the right wing has no plan. That's why they work on "anti abortion, and anti gay rights, make English the national language, get rid of fluoride and so on".

Did you miss that part listed above? It's pretty damn specific, wouldn't you say?

Plan? I thought you said we do "Schemes"?

You do. That's why I said you guys had no plan.

Do we have a scheme or a plan?

 

[Flopper]

Hard to know where to start here, I disagree with virtually everything you posit. We don't have 2 separate economic systems, producers will produce and sell as many units as possbile to maximize profits, regardless of whether it's yachts or yahtzee. When the point is reached where producing more units become unprofitable, they stop. Producers are constantly searching for ways to cut costs or improve productivity, or improve quality, or in some way sell more products. To the extent they are successful in their efforts we are all better off.

You think the sme people who control production are the rich; nonsense, the people who ultimately control production are the consumers, their decisions for what to buy or not buy are the sole drivers for what gets produced. To do otherwise is to invite less profitability, you won't find many businesses who are willing to do that so the less well off will suffer or become more impoverished.

As long as you are describing a free market the customer does ultimately control production. However, when one supplier controls all or nearly all of a market, that supplier can control price and thus control supply.

But the supplier cannot control demand, and anyway how many cases do you know of where such a condition exists? To the point where lower incomes are denied access to a service or product? That would I think be zero.

Standard Oil controlled production of oil and sales in the US in the early 20th century. Oil was a necessity, prices could be raised with little or no reduction in demand. The company could raise prices without the threat of competition to produce the optimal production and price, at least until in 1911, the Supreme Court broke up the company.

 

[Mr Liberty]

The ultimate goal of unregulated capitalism is to control the supply so they can demand whatever they want for the product.

The ultimate goal of government controlled capitalism is to artificially inflate the price so that they can demand whatever they want for the supply.

Which makes more sense?

Totally unregulated capitalism eventually leads to monopolies, destruction of the middle class, and a host of social problems. All major economies are regulated today. The goal is to provide sufficient regulation to protect the people without overly burdening business.

Actually, corporations lobby for regulations that restrict competition so they can become monopolies. I do not see how a company can become a monopoly without the assistance of government. When was the last antitrust suit won against a company?

 

[Wiseacre]

As long as you are describing a free market the customer does ultimately control production. However, when one supplier controls all or nearly all of a market, that supplier can control price and thus control supply.

But the supplier cannot control demand, and anyway how many cases do you know of where such a condition exists? To the point where lower incomes are denied access to a service or product? That would I think be zero.

Standard Oil controlled production of oil and sales in the US in the early 20th century. Oil was a necessity, prices could be raised with little or no reduction in demand. The company could raise prices without the threat of competition to produce the optimal production and price, at least until in 1911, the Supreme Court broke up the company.

Got anything a little more current? Using an example from a century ago, before monopolies were outlawed doesn't do much to support the claim that today's big corps control supply and prices.

 

[Quantum Windbag]

As long as you are describing a free market the customer does ultimately control production. However, when one supplier controls all or nearly all of a market, that supplier can control price and thus control supply.

But the supplier cannot control demand, and anyway how many cases do you know of where such a condition exists? To the point where lower incomes are denied access to a service or product? That would I think be zero.

Standard Oil controlled production of oil and sales in the US in the early 20th century. Oil was a necessity, prices could be raised with little or no reduction in demand. The company could raise prices without the threat of competition to produce the optimal production and price, at least until in 1911, the Supreme Court broke up the company.

You really need to read some history books written by people that actually tell the truth. Standard Oil never had the power to raise and lower prices at will because they never controlled the market. What they did was develop new ways to deliver oil that were more efficient, which enabled them to charge a lower price. In fact, Standard Oil was what is now considered a socially responsible company. Rather than dumping a waste product called gasoline in rivers Standard Oil used it to power engines. Rather than pile waste on mountains it found ways to market the waste product and developed the first artificial replacement for beeswax.

Other companies did not like this, and they lobbied the government to eliminate the competition. You, for some obscure reason, think that this proves the free market produces monopolies, What it actually proves is that the government is the friend of people that are willing to use it to eliminate competition.