[ExI] Prices

[Lee Corbin]

Well, it looked like Dan wrote that Mirco wrote that Dan wrote that...

--- On Thu, 4/23/09, painlord2k at libero.it <painlord2k at libero.it> wrote:
 > > Il 23/04/2009 20.17, Dan ha scritto:
 >> > > --- On Thu, 4/23/09, painlord2k at libero.it<painlord2k at libero.it>
 >> > > wrote:
 >>> > >> The problem with food prices in developed
 > > countries is that we
 >>> > >> usually see only the final products costs. The
 > > cost of bread, in
 >>> > >> Italy, is only 10% dependent to the cost of flour,
 > > the rest is
 >>> > >> transportation, labour, capital goods, etc.
 >> > >
 >> > > Prices, where markets operate, depend on supply and
 > > demand.
 >> > > Governments often interfere with this by setting
etc.

But if you can parse that you must be some
kind of fucking syntax genius. Well, I'm not!
(And it was even worse in HTML.)

So here's what all that meant to me (of course,
this requires a fair amount of effort on my part,
having to unscramble posts four levels deep).

Ahem:

Dan wrote:
 >
 > [Mirco] wrote:
 >
 >> Dan wrote:
 >>
 >>> Mirco wrote
 >>>
 >>>> The problem with food prices in
 >>>> developed countries is that we
 >>>> usually see only the final products
 >>>> costs. The cost of bread, in Italy,
 >>>> is only 10% dependent to [on] the cost
 >>>> of flour, the rest is transportation,
 >>>> labour, capital goods, etc.
 >>>
 >>> Prices, where markets operate, depend
 >>> on supply and demand. Governments often
 >>> interfere with this by setting prices
 >>> or setting prices or setting quotas,
 >>> especially with food, energy, and
 >>> transportation.  (These, in effect,
 >>> and to the extent of the interference,
 >>> become "make believe" prices -- with
 >>> the extreme example being comprehensive
 >>> economic planning, where all prices are
 >>> set by the government and have no relation
 >>> to anything other than bureaucratic whim.)
 >>>
 >>> Costs, per se, do not create prices.
 >>> If costs did create prices, then we
 >>> would never expect to see someone
 >>> selling below cost or anyone making
 >>> the mistake of making something and
 >>> later finding out the expect price
 >>> was too low.

Nice econ lesson, thanks.

Mirco then adds

 >> I wrote about costs, not prices. They
 >> can sell bread at the price people
 >> want pay, here. In fact, the price
 >> difference from North and South Italy
 >> is large.
 >
 > Which probably reflects both differing
 > demands and supplies between the regions.

Well, Mirco, do you think that Dan is
right? How else to explain it? That is,
what?, folks in the south don't have
as much money? Or is it that they don't
like bread as much?

Or is the price greater in the south
because (i) transportation or storage
costs are higher and (2) total volume
is lower (with the earlier factors
helping to determine that)?

Or am I totally lost here, and the
price is *lower* in the south?

Lee