Originally posted by ignorant_ape
reply to post by dr treg
what utter twaddle [ no insult to the OP ]
but to quote the source he cites :
the cost of delivering food to the south of Italy now exceeds the cost of the food itself.
is the most assanine statement i have heard so far today [ despite 3 hours on ATS]
in any rational ecconomy - the price of any retail item =
the intrinsic costs of materials , processing & logistics
unless indirect subsidy is applied - no other pricing structure is feasible
Wrong. The price of a product is dictated by what the market will pay for that product. what you only illustrating is the cost to bring a product to market. I can use your formula for the above and get a price but then I wont make a profit.
Also, I can use your formula above and nobody will buy my products at what ever price is put on it.
Kinda that whole supply and demand thing. I would agree the article still doesn't really make sense for me, how is the cost of transportation for a full truck of food not equal more then the price you would fetch for it if the shelves are bare... I could see if workers wages had hyper inflated but then the prices of everything else would also.
In that situation the price of the food would be insane because demand is high and supply is now short.
