Supply side economics work...just not how we would like

[Wiseacre]

yes, exactly.

Supply is COST. Inventory is COST.

Demand is PROFIT.

Not necessarily. Demand is revenue, which may or may not exceed cost. Kinda depends on the price, if it's too high then demand will find alternatives.

Supply without Demand is Inventory. Inventory is COST.

If your selling things below cost, you wont stay in business long.

True, which is why lowering costs is so important. IOW, supply side economics.

 

[uscitizen]

It depends I used to work for US located Japanese company.
They imported goods fromt he parent company paid high for them sold them at a loss as far as the us sibsidiary was concerned but made big bucks in Japan.
Paid no taxes, sold out in 7 years or so. Then opened another subsidiary...

 

[Wiseacre]

It depends I used to work for US located Japanese company.
They imported goods fromt he parent company paid high for them sold them at a loss as far as the us sibsidiary was concerned but made big bucks in Japan.
Paid no taxes, sold out in 7 years or so. Then opened another subsidiary...

And your point was what?

 

[Vidi]

Not necessarily. Demand is revenue, which may or may not exceed cost. Kinda depends on the price, if it's too high then demand will find alternatives.

Supply without Demand is Inventory. Inventory is COST.

If your selling things below cost, you wont stay in business long.

True, which is why lowering costs is so important. IOW, supply side economics.

You can lower costs to ZERO, if there is no demand for your product there is NO PROFIT.

Supply is therefore not the driving force.

 

[ItsjustmeIthink]

People aren't still insisting that demand is less important than supply, are they?

 

[Wiseacre]

Supply without Demand is Inventory. Inventory is COST.

If your selling things below cost, you wont stay in business long.

True, which is why lowering costs is so important. IOW, supply side economics.

You can lower costs to ZERO, if there is no demand for your product there is NO PROFIT.

Supply is therefore not the driving force.

Beg to differ, if you lower the price enough, you'll get demand if people want your product or service. You do understand the relationship between price and demand, do you not?

 

[The Rabbi]

True, which is why lowering costs is so important. IOW, supply side economics.

You can lower costs to ZERO, if there is no demand for your product there is NO PROFIT.

Supply is therefore not the driving force.

Beg to differ, if you lower the price enough, you'll get demand if people want your product or service. You do understand the relationship between price and demand, do you not?

Libs say the darndest things when it comes to econ.

 

[Vidi]

True, which is why lowering costs is so important. IOW, supply side economics.

You can lower costs to ZERO, if there is no demand for your product there is NO PROFIT.

Supply is therefore not the driving force.

Beg to differ, if you lower the price enough, you'll get demand if people want your product or service. You do understand the relationship between price and demand, do you not?

The idea that price creates its own demand is a myth.

Two reasons:

1) The product itself has to have value in order for that to hold true.
2) If you lower your price below your cost, you lose money, regardless of how many you sell.


You can create a shortage thus driving up the prices IF a demand already exists, but you simply cannot create demand based solely on supply alone.

 

[Wiseacre]

You can lower costs to ZERO, if there is no demand for your product there is NO PROFIT.

Supply is therefore not the driving force.

Beg to differ, if you lower the price enough, you'll get demand if people want your product or service. You do understand the relationship between price and demand, do you not?

The idea that price creates its own demand is a myth.

Two reasons:

1) The product itself has to have value in order for that to hold true.


This is true, but value does have a direct relationship to the price. Obviously if the product has no value at any price then demand is non-existent, and presumeable should already be off the market.


2) If you lower your price below your cost, you lose money, regardless of how many you sell.


Sure, which is why you want to lower your costs as much as possible, which is supply side economics. Can't believe you are arguing against the idea that a lower price means more sales.



You can create a shortage thus driving up the prices IF a demand already exists, but you simply cannot create demand based solely on supply alone.

I think you can, sometimes anyway. And I am certain you can increase demand through supply side economics by making products with a higher quality and/or a lower price. Happens all the time, if you can't do one or the other then you tend to start losing market share.

 

[The Rabbi]

There is hardly any product that has no value.

Remember all those piles of used tires? Don't see that anymore, right? Who wants used tires? They have no value. Except they did to companies operating furnaces at very high temperatures, for bricks etc. Tires burn just fine at hot temperatures. End of problem.