In other words, in a competitive market they can’t maintain those high prices forever. If they do they make less money. Consumers will start buying cheaper generic products and the companies that fill that niche will gain market share. Other companies will start to drop their prices to gain market share back and restore their profit margins.

Production costs go up (Supply), effecting the prices, which will then effect Demand and thus quantities. Say there’s a shortage of rubber (Supply), the price of products that use rubber goes up. Demand for those rubber products goes down as a result. (There is of course elasticity and inelasticity of Demand, but that’s still Demand.)

Marketing convinces consumers they have to have some great product. Demand. Do you get what I’m saying? Marketing, and every other thing in the universe that effects a decision to buy something, is simply part of Demand. Shrinking a bag of chips will have some effect on Demand. Supply and Demand are not pieces of a puzzle, they are the entire puzzle. Everything else is a piece of that puzzle. There is nothing magical about it, nothing good or evil about, nothing innately moral or immoral about it. It just IS, like gravity.

Btw, I know I passed up my tapatio doritos when I first noticed the slightly smaller size, and I still only buy them when they are on sale, which is as often as not. Demand. In a competitive market some companies will keep their bag sizes the same because they want market share. But brand loyalty is a thing too though, and I just don’t fucking like flaming hot Lays chips.

The economic force in this case is enhancing shareholder value, an often overlooked aspect of the equation.

Companies can minutely control prices, quantities, profits, sales, supply and demand, to find the sweet spot. They also have the ability to monitor markets and feedback that information to their production and distributing and pricing organs. The buyer doesn’t have access to all those resources, and is limited in his ability to communicate with other consumers and coordinate his purchasing with his fellow victims. He doesn’t have a bloody chance.

For example, if production costs go up and a rise in prices threatens to downgrade profits because of reduced demand, the producer has the option of altering the packaging of a product so the cost per unit remains the same but the cost per pound goes up. And if you spend much time at the supermarket, you’ll see that “competing” companies do this simultaneously. They may not be colluding to fix prices, but the result is just the same. They have all been making the same calculation, so they wind up acting together. So the price of a loaf of bread remains the same, but the loaves are smaller. And all the brands are doing it. The average consumer may not realize this is happening, and he certainly can’t communicate with his fellows even if he does, Meanwhile, the cost of retooling the factory to make smaller loaves (that have to be purchased more often) is passed on to the consumer.

The same processes occur when companies purchase commodities from one another, but they have procurement departments and research divisions and other resources to scour markets for good prices, and they purchase in bulk and sign long term contracts so they are able to influence sellers more effectively to lower their prices. When a steel foundry purchases coke then the Law of Supply and Demand is much more likely to be operating effectively due to something akin to economies of scale. The price of bread may be going up, but the farmer gets less and less for his grain every day. He gets more productive but he is still going into debt. Where is all that money going? But in consumer sales, the consumer gets screwed. That’s why the American economy is all about marketing to consumers than it is about making things. Its easier to make a profit.

Of course, the producers can honestly tell themselves they are not manipulating or exploiting or even cheating their customers, they are just “responding automatically to the laws of economics”. Sheeeiiit.

And the consumers can always be persuaded the ripoff is all Biden’s and his commie friends’ fault.

Its all Marketing 101. You can actually get a PhD in this. At hundreds of universities all over the country. Talk about marketing…

This is intuitive. If the price of a loaf of bread were $1000 almost no one would buy bread and profits would be nothing. If the price were a penny they would be selling out every day but the profits would still be next to nothing. Finding that sweet spot where profits are maximized is what the concept of S&D is all about.

Note that several big retailers have announced price cutting campaigns because they overshot, and now have to pull back, and make themselves look altruistic while doing it.

Let’s just stick to Trump and his team making up bullshit about Kamala’s announced policy. Price controls that Trump rails about actually already exist in the form of Farm Bills where subsidies exist to stabilize food prices, just not at the end of the supply chain on the market shelves. Kamala’s idea of fines for price gouging companies falls into the category of regulatory oversight not price controls.

Does this mean we should let Big Government do whatever the hell it wants? Of course not. All interference and regulation in public or economic affairs must be carefully considered and gradually implemented. Even then, sometimes the best-meaning bureaucrats (even after meticulous study) make grievous mistakes, or conditions change, or bad people exploit the situation. That’s why we have governments and elections and democracy and a free press, so that the regulatory process itself can be regulated. And even then sometimes we err or villains take over.

But when people, or organizations, have a vested financial interest in any policy being carried out in a certain way, they simply cannot be trusted to act in the public interest. Its not that they are evil people (although there certainly is no shortage of THEM around) its just that they have an incentive to be evil. Every decision point in their procedure and process will always have a thumb on one side of the scale. All those “free market mechanisms”, like competition and the Law of Supply and Fucking Demand, which are supposed to automatically trend towards fairness and efficiency tend to be forgotten when it gives someone with power a little advantage. The “invisible hand” too often is totally non-existent.