Quote:
Originally Posted by Rochard
But why do we base it on supply and demand? The more they charge us, the less the demand, and the more supply. Do they charge me more for a bottle of water in Phoenix where it's hotter because of more demand? I think not.
If demand grows, costs go up? Why? It costs less to produce more in bulk. If I buy ten million barrels the price is set at once price, but if I buy fifteen million barrels it should be cheaper, right?
Why is the price of oil going up? Because of Libya? They produce two percent of the world's oil, nearly all of which goes to Europe? Libya can stop producing oil in the morning and it shouldn't have any affect on the price of oil in the US...
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Water is not in short supply in Phoenix.
Because they speculate.
When you have demand and no supply, you charge more.... a rare mustang sales more than a more common one, because it's rare.
World demand shifts costs, if one country stops buying or starts over buying, it hits everyone across the world.
Same with all things pulled from earth... China did buy a ton of rare earth metals and over night the price doubled. Higher demand, same supply = higher prices.
It's natural business, and add in speculation that increases/decreases based on what 'people' think, you get the big fluctuation we have.