Originally posted by snake:
as in Max's case..cost is $50 , there will be no supply below $50
<font size="2" face="Verdana, Arial">That actually is not true. There are free market occurrences that happen where goods are sold below cost in order to clear out old items from inventory, as "loss leaders" to induce more shopping of higher profit margin goods, or because a secondary accessory to the primary good has a very high profit margin (eg. razors and blades).
Originally posted by I_rv_too:
1. US taxpayers ... who all too often pay $400 for a hammer. It happens every day and we tax payers have to settle up every April 15th.
<font size="2" face="Verdana, Arial">This is frequently the part that is
not taught in Econ 101. Specifically the issue of the government monopoly, its use of force on the tax payer, and its effects on the free market.
The ripple effect of the impact of government direct and indirect taxation on business and the consumer is astronomical!
In
Where No Libertarian Has Gone Before L. Neil Smith states:
"...just to put it in what may seem like everyday, more practical terms, half of everything we make -- to be precise, 47% or our income -- is taken from us in the form of income taxes, sales taxes, property taxes, and so forth. To add insult to injury, half of what we spend evaporates the same way, not spent on the quantity or quality of the goods and services we think we're paying for, but wasted on corporate taxes, inventory taxes, and that sort of thing.
What's even worse, according to economist Arthur Laffer, the burden of complying with socialist regulations doubles the price of everything again, so that we're spending eight times as much as we should need to, to acquire life's necessities and luxuries. Every day, we run on one eighth of our real capacity, while right-wing and left-wing socialists greedily gobble up the remaining seven eighths of our substance, not to mention our opportunities, our futures, and our children's futures."
<font size="2" face="Verdana, Arial">I don't think I can say it better than that!
Originally posted by I_rv_too:
The flashlight companies ... particularly the tactical weapon light manufacturers ... know that the law enforcement and military market will bear much higher price than the regular market.
And that's why the manufacturers charge so damn much for their products.
Their price, in no uncertain terms, has nothing to do with development or actual material costs.
Nope, these firms charge astronomical prices because they know their customers will pay the price ... because their lives depend on it.
It's all profit driven. And it's all driven on setting the price as high as you can ... provided you have customers willing to pay the price.
<font size="2" face="Verdana, Arial">These statments suggest a lack of understanding of real free market principals and how the government actually works.
Do you know how much SureFire pays for development? If you have the number, I'd surely like to know. They are not a publically traded compay, hence their information is private.
So first of all, you really can't say if their sales price justifies their development and production costs when you don't know those figures to begin with.
Second of all, LEO and Government agencies get preferential prices as compared to us regular consumers when they have to purchase common products on the open market. Its only when the government uses a closed bid system for uncommon and specialized products do we see higher prices than the free market.
Lastly, for a given common available technology, if one company is charging higher prices than the market is willing to bear two things will happen.
</font><ul type="square">[*]<font size="2" face="Verdana, Arial">People won't pay the money for that product unless they must have it for specific personal or professional reasons. As in, it won't be a high volume, common use product.</font>[*]<font size="2" face="Verdana, Arial">Other companies will see the profit potential of selling a higher volume of the product at a lower price. They will move into the market and do so.</font>[/list]<font size="2" face="Verdana, Arial">But, this assumes a easily reproduced technology, with low investment costs and small barriers to entry. All bets are off when it comes to a specialized technology, high manufacturing costs, or other high barriers in the market.
So, given the market that SureFire is in, which I think is fairly specialized, either there is a technology advantage, a high product manufacturing cost, a relatively small market, all of the above, or some other barrier we are unaware of.
This has to be the case, otherwise there'd be many more companies out there making SureFire type lights for much cheaper prices and everyone would have two or three.
