Sunday, October 23, 2011

One man's junk is another man's treasure

When I was a kid my favorite candy was a Hershey's chocolate bar, still is actually. It cost 50 cents and it costs just a bit more than that now. I always wondered why that price would change from location to location and over time. I thought it was very odd that it did not stay fixed. About 11 seconds into any econ class and you learn the "why". In a free market, as odd as it might sound, consumers, not the producers, generally set the price for the products they are buying, not the other way around. Trying to get this point across to the average Joe on the street might be a bit difficult, however. We often here complaints about gas being too expensive and that the greedy owners ought not be allowed to charge such high prices. I always thought it might be fun to have a time machine and bring one of the pioneers from early Fairbanks a 100 years into the future and ask him if he thought paying that much for a mechanical machine to move you around and keep you warm during cold winter days was too high. I rather think he would nearly consider spending his last time on such a wonderful contraption. The fact is even at $5 gasoline we would still shell out quite a bit because the alternative to walking to and from where we needed to go at 30 below is unbearable. There is a big difference between what we 'wish' the price would be and where it really is. The free market allows you a variety of choices and the most important of which is to say 'no' I will not buy that good at that price. Sometimes I think people forget they this.

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