Quote:
Originally Posted by BarryRX
I am always amazed that we live in a fairly conservative community among people that talk about capitalism and the benefits of a free market. Yet, when it comes to the most basic of economic principals, namely supply and demand, they don't understand. If you were in economics 101 and the professor said "if the demand for a product rises (the number of people trying to get into restaurants) and the supply says pretty much the same (the number of restaurants available), what will happen to the price for that product?" I'm sure everyone will answer that the price will rise. How far will it rise? Until supply and demand equalize. Supply and demand (among other factors) is what influences the CPI, not the other way around. Raising prices in a restaurant is not price gouging as the OP stated. It doesn't even fit the definition.
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Hi BarryRX: You are absolutely correct. However there is another economic principal to counter supply and demand and its called elasticity". How much are you will to pay for a slice of pizza? Two slices? three slices? four slices?
Personal Best regards: