Is price and value interchangable? - Page 5 - Politics Forum.org | PoFo

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#14947941
Rancid wrote:Assuming water always has a high demand is incorrect.

By the way, the question you as asking is called the diamond paradox. It was answered like 100-200 years ago (I think). The key is in the fact that you cannot assume the demand/value of water is always high.

https://en.wikipedia.org/wiki/Paradox_of_value


It has indeed @Rancid.

Although are you saying the demand for water is not high?
Last edited by B0ycey on 21 Sep 2018 17:44, edited 1 time in total.
#14947942
Victoribus Spolia wrote::lol: Leave it @B0ycey to fuck up the title's grammar and spelling.


I am not a grammar Nazi. Although I was pissed that I cannot change that mistake when I picked up on it. But is interchangable spelt wrong?
#14947944
B0ycey wrote:I never said demand doesn't matter. Without demand there is no price. But if you look at a commodity such as water which has a high supply and demand compared to Gold with a lower supply and a lower demand, which has a higher price?

Demand exists until satiation, after you have a litre of water per day (from many potential sources for example there will be some water content in the food you eat) you really don't want any more and so your demand drops off to nothing. There is no satiation limit for gold.
#14947945
SolarCross wrote:There is no satiation limit for gold.


Maybe in El Dorado, unless of course we describe such conditions as excess supply.
#14947947
Both supply and demand drive prices. I wonder what is going on when someone wants to overemphasise the influence of the supply and relatively disregard demand. Especially someone who says suspicious things like "economic factors like capitalism". lol.
#14947949
SolarCross wrote:Both supply and demand drive prices. I wonder what is going on when someone wants to overemphasise the influence of the supply and relatively disregard demand. Especially someone who says suspicious things like "economic factors like capitalism". lol.


Just to be clear, I do not disregard demand. It is a factor in price. If it wasn't the phase would be "supply" and not "supply and demand"
#14947975
B0ycey wrote:Although are you saying the demand for water is not high?


Sort of, it's a little more nuanced than that. I'm saying the demand for water is not always high. It can be high, but it's not always high. Further, overall, when the utility of water is factored in, the overall demand is actually not very high. This is hard to understand because well, we need water to live. However, we only need a very very small amount of "high valued" water to live. After that, water is not high valued.

As I said, this is the fundamental concept to solving he diamond paradox (or in your case, the gold paradox). Only the first few liters of water we use to stay alive has super high demand. Once you have enough water to stay alive, more water just isn't as important as those first few liters. The value of water drops dramatically. Now, the next few gallons certainly still has value and demand (just not as high as the first few liters). However, once those needs are met (like hygiene, cooking, cleaning), the demand drops even more.

The end result is water being priced very very low in comparison to gold or diamonds.

Due to this lowered demand/value of water with each additional gallon that you have access to, the overall price of it stay lows.

Now, I'm saying that value and price are for the most part interchangeable. Thus, because the price is low, the value of water is also low.
#14947976
Rancid wrote:Sort of, It's a little more nuanced than that. I'm saying the demand for water is not always high. It can be high, but not always high. Further, OVERALL, I would say, yes, the demand for water is not high. OVERALL.


On an individual level or a social level? Water is always high in demand but you personally don't demand it all the time. But individualism is not a factor to waters demand. Social conditions are.

As I said, this is the fundamental concept to solving he diamond paradox (or in your case, the gold paradox). Only the first few liters of water we use to stay alive has super high demand. Once you have enough water to stay alive, more water just isn't as important as those first few liters. The value of water drops dramatically. Now, the next few gallons certainly still has value and demand (just not as high as the first few liters). However, once those needs are met (like hygiene, cooking, cleaning), the demand drops even more.

The end result is water being priced very very low in comparison to gold or diamonds.

Due to this lowered demand/value of water with each additional gallon that you have access to, the overall price of it stay lows.

Now, I'm saying that value and price are for the most part interchangeable. Thus, because the price is low, the value of water is also low.


The Water-diamond paradox is a marginal utility conundrum and it's formulas are based on supply. It does not help your argument at all. Read your own post and actually understand what you are saying.
#14947982
B0ycey wrote:Social conditions are.


Aren't social conditions largely shaped by individual actions/needs/wants?

B0ycey wrote:The Water-diamond paradox is a marginal utility conundrum and it's formulas are based on supply. It does not help your argument at all. Read your own post and actually understand what you are saying.


What's my argument?
#14947985
Rancid wrote:Aren't social conditions largely shaped by individual actions/needs/wants?


Not really. Where water is abundant on Earth isn't really a factor on you wanting a drink of water at this moment of time. However the fact it is abundant and many people at this moment in time will want a drink of water is.


What's my argument?


If your argument is that supply is the major factor in price you agree with me. If you think demand is the factor in price you agree with VS and SolarCross.

The water-Diamond paradox measures in supply. So you tell me. What is your argument?
#14947987
B0ycey wrote:If your argument is that supply is the major factor in price you agree with me. If you think demand is the factor in price you agree with VS and SolarCross.

The water-Diamond paradox measures in supply. So you tell me. What is your argument?


It's both supply and demand. :)
#14947988
Victoribus Spolia wrote:Well of course! But even if the options for you were as much free water as you could gulp, it doesn't change the fact that you would be willing to pay whatever you could afford for that water had you been dying of thirst just five minutes prior as compared to swimming in a fresh water lake.

Lets not over complicate this, value changes based on YOU and price reflects this value in a market where supply exists to meet demand.


Defining the value of a thing in terms of what you are willing and able to pay for it is nonsense. Because, how then are you measuring the value of what you're giving up? If you're in the Sahara desert, and you buy a gallon of water for $1000, then you would say that the gallon of water is at least as valuable to you as $1000. But then what's the value of $1000 in the Sahara desert? There's no way to avoid circularity.

But if you measure the value of a gallon of water in terms of its ability to keep you alive (say in units of time), only then do things begin to make sense. That value remains constant regardless of the relative abundance and the price of water. There is no circularity and value is clearly independent of the price. Hence, they cannot be the same.

This is a loser's take on the market, Whether i become an off-grid farmer, an entrepreneur, a chef, or a prostitute is based on my ability to market what I got to those willing to pay for it.


Prostitution is a very apt way of describing it. The real players pay you and you get to decide how best to please them.
#14947990
Rancid wrote:It's both supply and demand. :)


Perhaps I was being far too simplistic. The argument is more complex than that.

So care to elaborate. No one is arguing that they both are needed. How do you think price is determined. By the volume of supply of the product in the market or the value you attribute to the product?
#14947992
B0ycey wrote:
Perhaps I was being far too simplistic. The argument is more complex than that.

So care to elaborate. No one is arguing that they both are needed. How do you think price is determined. By the volume of supply of the product in the market or the value you attribute to the product?


Both.
#14947994
Rancid wrote:Both.


If it is both explain why water and diamonds are not roughly the same price. Why does the one is short supply have a greater price than the one that is high in demand.

If that is your argument make your case.
#14948002
Rancid wrote:I already explained.


By showing supply is the major factor. Thanks I guess.

I thought the whole point of the thread was if price and value are basically the same thing.


Actually, everyone says they aren't. Only you say they are.

So again make your case.
#14948004
B0ycey wrote:Actually, everyone says they aren't. Only you say they are.

So again make your case.


I don't have a case to make. Just sharing thoughts/ideas.

Price is an attempt to quantify the value of something. It don't be a perfect match, but it will be close enough.
#14948010
Rancid wrote:Price is an attempt to quantify the value of something. It don't be a perfect match, but it will be close enough.


Price is a number, but not one that quantifies anything. It's a move in a chess game, not a measurement.
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