Posted on 01/05/2013 8:19:06 AM PST by Olog-hai
Cost is not passed onto consumers (supply and demand). It goes back to the origin of production. Why is this sophism so endlessly popular?
I disagree. The cost of meeting increased regulations will be passed onto the consumer. However for small farmers the ability to do this and still make the amount of sales needed for profitability is limited. So yes at some point the cost does go back to the source of production.
A large producer can distribute the increased costs over a wider number of products so that increase is not felt as keenly by consumers. Also there are more steps between the producer and the consumer and those costs may be more readily absorbed by others before the goods reach the consumer. For example a wholesaler who purchases directly from the producer may decide not to pass on increased wholesale prices.
A small producer who has a limited amount of goods that are sold in a smaller market has a point at which the cost of offering the goods for sale is more than the amount of money people are willing to pay for those goods. He can not simply increase his market price without taking this into consideration. So yes that portion of costs will go back to him.
Bottom line the big guys can more readily meet the costs of new regulations. Costs do get passed down to the consumer if those costs have not been absorbed by others as the goods make their way from the producer to consumer.
But I could be wrong maybe all increases in food prices are due to any thing but the desire for farmers and sellers to make more money. Maybe they all do just decide to eat the costs and reduce their income.
I don’t want my food safer. I want my government to get out of my business.
Some of My Blog Pages Are Disappearing
This thread has been pulled.
Pulled on 01/05/2013 4:09:40 PM PST by Admin Moderator, reason:
Not our problem.
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