08 September 2005

Tree-stump shaped demand

Some points from the argument between Tim Worstall and Jesse Taylor over "price-gouging".
To recap: John Stossel made an argument, with a hypothetical example, to the effect that if you pay a high price for some essential, you should be glad that the price was set high, because had it been set low the vendor would have already sold out and you wouldn't have it at all.

Jesse Taylor attacked this argument as "odious".

Tim Worstall then nominated Jesse Taylor as an "Economic Idiot"

After that, things started to get unfriendly.

The sides are so far apart in their unstated assumptions that they appear quite unable to comprehend each other. After much pondering, however, I think I understand Taylor's claim that the seller is "artificially encouraging scarcity".

Read on...

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