Expansion Pack For Train Simulator

I just found a discussion on the program C in Air. The question that is asked is a question that has long preoccupied philosophers and economists in the past centuries, but has been relatively neglected by economists during the last century: what is the fair price of a product?

The question arises in the case of clothing. Does the seller make obscene profits by setting a price too high? Are we the traders are "stealing" by selling overpriced clothing with indecent margins?

While economists have ceased interest in the issue because they became aware of the existence of market forces that drive (or not) the price to its "fair price". This idea is summed up well in the remark of a speaker who says: "But if you think that traders earn a good living if you have to do is install and set up your business." Implicitly, it takes an argument of classical economic analysis: whether competition is working well , then a price can not remain permanently above its "fair value". New entrants will be attracted by the "obscene profits" and lead a price war with incumbent firms. Therefore, the right price is nothing between the prevailing price when competition is intense, which is still the case in the clothing market (this is the position that I supported in the comments of this ticket).

So if you think prices are too high, either you're not patient enough and that we must wait until competitors are installed on the market, that competition does not play his work. The latter is probably the most convincing explanation. For example, many people are offended by the fact that pharmaceutical companies sell drugs to unaffordable to developing countries. Are they right to be offended? Yes, because patents are a way to protect a company from the competition and allow it to charge very high prices. The purpose of patents is to give a bonus to the company as a monopoly power in order to encourage them to innovate, but it woefully inefficient .

another example. Should we yell from flying towards the cost of texting ? Yes, because here, few new entrants are allowed (just look at the boat as it was to allow Free to enter the market). It is therefore likely that traders tend to SMS overcharged by conducting a tacit understanding. If so, the price is too high and regulation may be necessary.

The conclusion I reach is that whether a price is too high, it will not necessarily make much sense to look at the margins of firms. It is better to see if a new entrant can easily enter the market. It was then immediately realize that in supermarkets, prices are probably too high because of regulations that impede the entry of new competitors .