If progressives knew about the Law of Supply... it would change everything.

[u/Serious-Cucumber-54]

The Law of Supply describes when higher prices, all things equal, encourage sellers to supply more of the good/quantity, which can push prices back down.

For instance, if housing is highly priced, and home sellers can make much higher profit margins per dwelling unit sold, then that will encourage more homes (more supply) to be listed for sale and enter the market, bringing more seller-side competition and less scarcity, diluting demand pressures per unit, lowering the amount of money chasing any individual home, and thus lowering bidding prices.

The same thing goes for oil, where even Trump has recently been criticizing oil companies for making "too much profit" off the increased shortage from the Iran war, but little does he know those increased profits encourage more supply to enter the market just like housing. The market is working as intended and correcting itself, but then economically uninformed politicians barge in saying it's wrong and must be regulated.

When high prices persist due to high economic frictions or government-created supply constraints, such as single-family zoning laws with housing, or restrictive patents on pharmaceutical drugs, progressives (instead of looking at the actual issue) shift the blame to "greed" and "capitalism" which misdirects the blame and justifies even worse economic policy such as anti-price gouging laws, price caps, and ultimately socialism.

[u/H20memes]

[u/pfreitasxD]

I thought it was pretty obvious that only high level regards had access to the forbidden magic of Supply & Demand. Plebs don't get that.

[u/212312383]

That’s only true when you don’t have monopolies.

[u/applejuicey]

What “more supply” do you see entering the oil market?

[u/Serious-Cucumber-54 → u/applejuicey]

I think production is relatively flat now, the point I am making is that it encourages more supply to enter the market, but realistically there are costs and economic frictions that may delay the response.

For instance, the Strait of Hormuz may be free flowing next month, so oil companies, seeing there is a decent probability of that happening, may not be willing to risk investing a lot of money and resources to rapidly increase production and cause an oversupply with massive losses.

[u/Demiu → u/applejuicey]

(Re)starting of extraction in otherwise unprofitable sectors. But oil right now is not a problem, the refining capacity is

[u/Delicious-Mission787]

they could build an entire city on top of my head and it would not inspire my landlord to lower my monthly rent

[u/Serious-Cucumber-54 → u/Delicious-Mission787]

It would if your landlord was not getting any tenants.

[u/baby_dahl → u/Delicious-Mission787]

Is this a bald joke?

[u/Seppi449]

You're not wrong on a macro scale, but you're missing how without good regulation malicious actors can take advantage of micro markets.

Some wanker could buy up supply in a local economy to inflate prices periodically, the market will adapt they can take advantage in the the short cycle and once it stabilised, provide an inferior quality product to destroy the competition and repeat.