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by ceejayoz
411 days ago
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> Both supply and demand change depending on the price. But that's a massive oversimplification. It's like saying programming is "just typing". Technically, sure; accurate, no. There's latency in the real world. Bad actors. Information asymmetries. Regulations. Monopolies. Stuff you can't do without and can't even always decline (ambulance ride for an unconscious person). Fake news about a supply crunch changes demand without changing supply for a while. |
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One of the primary reasons for combination in low-margin markets is to gain pricing power. And even if there are 2-5 entities in a given market, informal price collusion is far from unheard of.
If OP wants an intro to the determinants of price elasticity, starting here would be a good idea: https://en.m.wikipedia.org/wiki/Price_elasticity_of_demand