B0ycey wrote:If there is immediate neccesity the price could be infinity high.
This is only true if the seller deems the item infinitely necessary to themselves (meaning the minimum profit they are willing accept is crazy high, or the item is as important as Godstud's friendship). At which point, the item is never up for sale anyway.
B0ycey wrote:Only the supply reduces it to a price to an affordable level. So value could be any price regardless of importance.
It's not just supply that can bring down price. What if the item needs to unloaded because it's just taking up space? I could have the only bottle of soda in the world. Sure, I could price it at a million dollars, but what if I simply don't want it on my shelve anymore? Couldn't I bring it down to a price that at least SOMEONE is willing to pay? What if the item has an expiration date too? Surely that will affect it's value over time too.
I don't believe supply is the only lever that can affect price. I need more to be convinced of that.
B0ycey wrote:The value of the item to the seller is the profit margin. That relies on demand rather supply actually. The greater the demand the lower the profit margin needs to be.
This statement doesn't make sense to me. It sounds backwards.
Who's demand? If there's a lot of demand for a product, profit margins can go up not down. IF there's a lot of demand, you could charge more (because people really want the item) which means more profit.
I would also say that the value of the item is not the profit margin. The profit margin is just the parameter the seller wants to maximize. The value will be the minimum profit they are willing to accept plus whatever the seller bought the item at.
This sort of leads into my thoughts into the idea that supply and demand are like space and time. You can't really pull them apart. They are coupled. You change one, and then you affect the other. Prices just get pushed and pulled between the interplay of supply and demand.
I can think of 11780 reasons Trump shouldn't be president ever again.