Shouldn’t prices go down if production increased?

Shouldn’t prices go down if production increased?

Shouldn’t prices go down if production increased?

Shouldn’t prices go down if production increased?

Basic Economics Example

1. Let us first assume a downward sloping aggregate demand curve and upward sloping aggregate supply curve, as is the case of most products and services being sold in a capitalist economy; where the intersection of both curves shows the equilibrium price and quantity that balances the market.

2. If there is a sudden demand for any product, such as the current panic buying in ammunition; that event will essentially shift the aggregate demand curve to the right, resulting in a new equilibrium higher price that suppliers are willing to supply buyers, given their current production capacity.

3. Since suppliers know that this sudden demand shock for ammunition is panic based and not because of a permanent increase, at least not yet, of buyers that will continue to buy ammunition from now to the future; they will likely not make any additional production capacity improvements that would be necessary to permanently shift the aggregate supply curve right; which would bring prices and quantities of ammunition back to pre-crisis levels.

4. What does this means for the traditional 2nd Amendment shooters?  We are going to have to live with higher prices, until the panic buyers frenzy ends.  Once it does, the aggregate demand curve for ammunition will most likely slide back to its original pre-panic equilibrium position, resulting in the supply and prices we were familiar before the pandemic crisis.


Any questions?

Yes i have a question. With regards to the decrease in the marginal propensity to consume given the exodenous increase in supply chain instability, would you elaborate upon the impact non-linear demand would have on consumers under the premise that the expected utility theory would mandate supply side economic growth independant of the y axis aggregate demand volatility?

Heads

Supply and Demand, Econ101

What I've found is that the guys buying my "overpriced" ammo were glad to get it, most knew prices and supply were cheaper before the pandemic but they'll admit that they got caught short for whatever reason and feel a need to get some ammo NOW.  What is somewhat amusing to me is those that are making cracks about profiteering or wringing their hands and boo-hooing the evil gougers--I DON'T SEE YOU SELLING ANY OF YOUR STUFF AT PRE-PANIC/SHORTAGE PRICES. [Masamune's latest offering is probably the exception that proves the rule]

I fill that need as I see fit--I'm willing to let pretty large quantities of ammo go to others (200 to 500 rounds, 1K if someone really wants it).  Meet me in town and have cash in hand.  I'm not sanctimoniously doling out a few rounds at a time and putting obnoxious conditions on people to "qualify" to buy my ammo--if you want what I got, I'll sell it to you. Period.  I don't need to know why you are buying ammo, that's your business.

As for X Ring, they run their business as they see fit.  That's what CAPITALISM in the USA is all about.  I probably won't give them any of my business, that's also what the USA is about--free will and making up your own mind.  Public shaming went out with the Pilgrims.

Supply and Demand, Econ101

What I've found is that the guys buying my "overpriced" ammo were glad to get it, most knew prices and supply were cheaper before the pandemic but they'll admit that they got caught short for whatever reason and feel a need to get some ammo NOW.  What is somewhat amusing to me is those that are making cracks about profiteering or wringing their hands and boo-hooing the evil gougers--I DON'T SEE YOU SELLING ANY OF YOUR STUFF AT PRE-PANIC/SHORTAGE PRICES. [Masamune's latest offering is probably the exception that proves the rule]

I fill that need as I see fit--I'm willing to let pretty large quantities of ammo go to others (200 to 500 rounds, 1K if someone really wants it).  Meet me in town and have cash in hand.  I'm not sanctimoniously doling out a few rounds at a time and putting obnoxious conditions on people to "qualify" to buy my ammo--if you want what I got, I'll sell it to you. Period.  I don't need to know why you are buying ammo, that's your business.

As for X Ring, they run their business as they see fit.  That's what CAPITALISM in the USA is all about.  I probably won't give them any of my business, that's also what the USA is about--free will and making up your own mind.  Public shaming went out with the Pilgrims.

mahalo for making a thread that was not about you, about you...

Someone needs a hug.

Ye who shalt not stockpile shall suffer unto the price gouging
-prepper economics 101