🎸 Price Discovery | How Prices Are Determined?

[@saygoodnightkevin]

This video is great! Would you mind if I used clips from this for a video I'm working on, if I link to your video?

[@EconClips]

Thanks! We don't mind.

[@saygoodnightkevin]

Thanks so much!

[@saygoodnightkevin]

Here's a link, if you want to check it out! Thanks so much! kzbin.info/www/bejne/iHa7nJKEgL-mrbc

[@EconClips]

Say Goodnight Kevin thank you :)

[@andrewgibb8846]

This video clears up 42 years of fog in my mind about how pricing works between people. Thank you thank you 🙏 Excellent presentation 🍻🇨🇦

[@EconClips]

Thanks!

[@marunio435]

And that's how it works. Prices have nothing to costs of production. Austrian school of economics is correct.

[@antonburdin9756]

You refused assumption of “perfect information” but used it anyway. That aside, it is all ok for discretionary items, but what about essential goods (life saving drugs, food and shelter).

[@boshiko3587]

_Growtopian definitely need to see this_

[@rolesk8]

as always great video 😁 keep the hard work guys!!!!

[@Jesus_777.2]

Incredible Video I love every aspect of it. but I did have a doubt. On the example at 10:55 there are sellers willing to sell the guitar at lower than 200. I believe that would lower the initial value of the P interval to 150 as a seller values the product at that price

[@EconClips]

He values it at less than the market price, but he wants to sell at a higher price if possible. Everyone can sell at the market price, even if they would accept lower price in other circumstances

[@Jesus_777.2]

@@EconClips Thank you! You gave me something to consider

[@uristrauss6106]

I like the video, but the conclusion that goods will go to those who value them most looks wrong, as it doesn’t take account of economic inequality. Plenty of starving people value food more than the people who end up buying it. More generally, seems to me the way to begin the analysis of price determination is with the relative bargaining power of the parties, which includes wealth but also things like best alternatives, knowledge, transaction cost of looking for a better deal, etc.. All this business about prices being determined by marketplaces full of buyers and sellers is then a special case where alternatives are readily available at low transaction cost to those who have sufficient buying power.

[@TheWizardGamez]

If food prices are high. New food producers enter the market. And prices lower to meet demand. Anywhere there is demand. Supply will form.

[@IWouldLikeToRemainAnonymous]

Can anyone tell me why it wont arrange it self so that those with increased value in buying the guitar will buy from those whom value it more in selling the guitar? or in other words; why wont B5 buy from S1, while B4 buys from S2, B3 from S3, B2 from S4 and B1 from S5, which is all possible, cosidering that as the value of buying increases (when ranking people) it gives the ones higher up the leverage to buy the guitar from an equivalent valueing seller? wouldn't that at least make it possible for everyone in the example to get what they want? I see no reason for why the most valueing buyers have to buy from the least valueing sellers, or for that matter that anyone would have to buy from or sell to anyone in particular. The only way it will sort it self is so that both the buyer and seller have their criteria met. Also I'd say there's a greater chance of seeing those who value buying more than others buying as 'richer' and those who value selling more than others selling as 'wealthier'. The rich wont settle with something that a poor person can afford, not because they have to differentiate themselves from the poor (even though they may want to) but simply because the richer can afford a higher quality or rarer verision. The quality and rarity of a good matter since the rich (and everyone else) think will bring them more benefits than the same type of good a poor(er) person can afford bespite the higher price, though this has its limits. Wont then the different amount of interest for higher quality and rarity play a bigger role in who buys from whom than the different amount of interest in having the good at all? Consider two people, Nathan and Eric: • *Both* Nathan and Eric earn the same and spend the same over a year and that they are equally wealthy in every way • *Both* Nathan and Eric want to buy a guitar for they have an equal interest playing the guitar • However, Nathan is a newbie to guitars and thus cares more about getting *a* guitar than getting *a fancy* guitar, • While Eric is already an expert guitar player and thus wont settle with a cheap one, not because he 'supposedly' values playing the guitar more than Nathan but because he values the kind of guitar much more than Nathan do • Nathan will try to buy from the lowest selling person that meets his ideal for what kind of guitar he wants, though because he cares more about having any guitar than having a fancy one he could settle for a guitar that don't meet his ideal kind of guitar, the seller simply have to meet his criteria for a the kind of guitar he wants (a functioning one) • Eric will also try to buy from the lowest selling person that meets his ideal for what kind of guitar he wants, though he is more flexible with his time frame, for he needs to gather up more capital so that he may buy a new a high quality guitar, but also because if he is more likely than Nathan to not find a guitar that meets his high criteria for the kind of guitar he wants to buy, he will have to look somewhere else. There will be people that go empty handed (either from not buying or not selling) but that is because there's not enough buyers or sellers in the same equivalent range of price for everyone in every range to trade, right? By "equivalent range of price" I mean two overlapping ranges of sellers' min price not exceeding buyers' max price while also buyers' max price not falling short of sellers' min price.

[@charlesmaeger6162]

The price paid for something is of practical and historical importance. Why is it so difficult to track prices, going back decades, on the internet. There is an explosion of knowledge on the internet. Try to find out what people were paying in the 1960's for goods being sold in a grocery store via the internet.

[@TheWizardGamez]

The price of a product is dictated by those who are willing to purchase it at that time. So while knowing what the price of something in 1960 may be of good historical knowledge. It really doesn’t much. Since the current economic conditions are different from those of even last year. Your time preference for a product could’ve changed. The scarcity of that product may have changed. Knowing that oranges cost double what they were last year. Doesn’t really change the fact that people were already unwilling to pay that price for oranges when there are a bevy of other juices at better prices

[@mysticalarchives7821]

The only criticism I have is that you exclude consideration of cost of production. Yes, I understand what you are saying, that, regardless of how much it cost to produce a product, it doesn’t guarantee that people will be willing to buy that product at the specified price. However, it is simply not possible for a business to remain operational or productive. Yes, they always sell their product below the cost of production. Over the course of a business’ lifespan, it will be able to improve production, so that production cost is lower. However, nobody is going to invest in creating a product if they aren’t going to be able to recoup their costs. And it doesn’t mean they have to recoup their costs right away, but they do have to set the limits of what they are willing to sell the product for based entirely on what it cost to make the product to begin with. This would be my main criticism of the Austrian school. It’s not that they are wrong about their assessment of prices, but their complete disregard for production cost causes them to have a Blindspot of, a factor that is very real and meaningful in the market when it comes to determining what price you sell your goods at. You can’t just disregard production cost because things only sell so long as people are willing to purchase stuff. Yes, that statement is true, by nobody is going to be incentivized to produce a product if the cost of production is greater than what they receive in return for the purchase of that product. So yes, the price of goods and services will be determined in part by the cost of production. To deny that this place is a factor in pricing is to remain blind to a crucial part of the market system.

[@austinbyrd4164]

If production costs are so high that the time it'd take to recoup the losses at the price consumers are willing to purchase it at isn't sufficient for them, then that business will stop supplying that good/service until they can garner investment &/or innovation to lower production costs through capital acquisition & creation. Resources would best be allocated elsewhere to where it is profitable under such circumstances, as that's both better at meeting consumers' most immediate/capable at supplying demands & their fiduciary duties.

[@Nancy-gr6db]

11:14

[@SilverSpy_]

Mogityant cxovrebis shinaarsi ver Gavige plius ekonomikashi damendzra

[@onurarikan3393]

how so slowwww

[@gorkemvids4839]

Things end up at the richest guy.

[@staxstirner]

Somebody gets a product and the other gets money. Sounds fair to me lol.

[@obviouslykaleb7998]

Görkem Seven Vids What does it matter if one person has 200 dollars more than someone else, if the other person has an iPhone that the first guy made?