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To: balrog666

i don't see how what you've said supports the idea that prices are independent of costs. the poster said prices were completely independent of all costs!

if costs didn't affect prices then all prices could be zero but companies could still pay costs. obviously can't be. i wish i could ignore my costs!!!!

i thought the poster was only indicating that tax costs did not affect price - but to my surprise he said prices are independent of ALL costs?!


330 posted on 08/27/2004 7:03:32 PM PDT by Chilldoubt
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To: Chilldoubt
if costs didn't affect prices then all prices could be zero but companies could still pay costs. obviously can't be. i wish i could ignore my costs!!!!

That's not what it means. For example, I deal with chemical companies and they don't have fixed prices - they have salesmen whose job it is to gouge me for all they can whenever they can. However, they also build up inventory that must be moved and I have leverage for making large purchases and storing what I need as excess inventory. And then I can also play off companies against each other to get a lower price when I need a high volume. It's a lot like negotiating for a new car.

And, in fact, I can sometimes buy what I need below their cost, just like you can score a great deal on a new car when their lot starts overflowing at the end of the year.

Everything is governed by supply and demand and that never remains static.

337 posted on 08/27/2004 7:12:50 PM PDT by balrog666 ("One man's theology is another man's belly laugh." -- Heinlein)
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