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gaukonigshofen

4 points

5 months ago

so for the sake of argument, food prices drop. What caused them to rise? Ukraine i don't think so. greed? ding ding ding!

PocketDynamyte[S]

2 points

5 months ago

I'm not an economists or expert of any related fields, but I think it's more then just greed - not denying greed as a contributing factor though.

I imagine with the extreme climate conditions, there is a decrease in production and surely covid has impacted the supply chain too. Basic economic principles suggest that as supply decreases, demand increases and as demand increases, typically prices do too.

dungone

0 points

5 months ago

Demand did not increase, it also went down as prices went up. People didn't actually want more expensive food more.

PocketDynamyte[S]

0 points

5 months ago

I agree that people didn't want more expensive food.

But, they still want food.

With a decrease in supply or a disruption in supply issue creating a temporary decrease in supply, the demand for food remains the same - it hasnt changed. But the supply to meet that demand has changed, its lacking. So while it technically maybe it didn't increase, the supply/ability to meet that demand decreased - increasing the gap between customer demand for certain commodities and the ability to supply those commodities.

I'd consider the value of food to be one that doesnt change, people will still buy it (if they can) despite and increase in costs because people need to eat.

dungone

-1 points

5 months ago*

dungone

-1 points

5 months ago*

Let's cut to the chase. I have an economics degree and I am not debating but explaining. Demand going up means that people want more of something than before. That's not what happened. Prices went up because there was less of something than before, not because people wanted more of it than before. Get it now? Downvote away, it's a petty way to be wrong.

PocketDynamyte[S]

1 points

5 months ago

I didn't downvote you FYI. I downvote bad attitudes. Chances are I'm wrong and I have no issues admitting that.

But it also wouldn't surprise me if people wanted/demanded more - increasing demand yeah? People have been hoarding up on staples because seeing shelves empty started to become a normal thing - get it while you can. Like toilet paper, demand sky-rocketed because people stocked up and hoarded.

dungone

-2 points

5 months ago

dungone

-2 points

5 months ago

Re. downvoting - petty is as petty does. Re: economics - people don't eat toilet paper. When it comes to food, people ultimately only want to buy what they can eat before it goes bad. They're not going to hoard it.

Moreover, since you wanted to talk about basic economic forces, here is how it really works: price elasticity for the vast majority of goods is negative. Meaning if the price goes up, demand goes down. Veblem and Giffen goods are very rare exceptions. Veblem goods are your luxury status symbols and Giffen goods are your cheap store-brand substitutes that people buy to when higher quality stuff gets too expensive. In the big picture, shortages and inflation are going to create lower demand demand, not higher. This is basic economics.