- Messages sorted by: [ date ][ thread ][ subject ][ author ]
- Next message: Patrick Henebry: "Re: Is this computer good for VR?"
- Previous message: Judy Evans: "Re: Off Topic-High prices in UK?"
- Maybe in reply to: Holland St.John: "Off Topic-High prices in UK?"
> And that 18 percent VAT leaves less spending money in peoples' pockets,
> making it an even smaller market.
Perhaps somebody could fill in the gaps but it is not quite obvious to my
naive way of thinking. The demand is less in a smaller market (tending to
produce LOWER prices ) . It is not clear what happens to the supply. If it
was locally produced then it would fall in the same sort of way and perhaps
the two effects would tend to cancel. Furthermore if you take into account
economies of scale, then supply would fall more than demand and prices
would indeed rise. But that is only for locally produced items. If they
come in from outside, the producers could still benefit from economies of
scale so it is no longer so obvious that prices should rise.
As I see it, the questioin is why is competition sometimes so low in the
UK? Some of these importers can behave just like monopolists; they can
adjust the price to almost anything and still sell their products. They
choose to sell less while making more total profit. (ditto for the
British exporter of those unusual folding bikes; in this case the
exporter may have had a monopoly of that design) . It is not obvious to
me that
competition is low here because there are fewer buyers.. I still suspect
that price fixing has something to do with it a lot of the time.
Is this all rubbish?
Anyway air-travel is yet another example.
Geoff.
P.S. A still more interesting question is why does the bad so often push out
the good ?
(e.g. MicroS)
-
- Next message: Patrick Henebry: "Re: Is this computer good for VR?"
- Previous message: Judy Evans: "Re: Off Topic-High prices in UK?"
- Maybe in reply to: Holland St.John: "Off Topic-High prices in UK?"
 |  |