ATLANTIC CENTRAL How exactly does that work? In the free market: Companies that charge too much go out of business. Companies that charge too little go out of business. Companies that provide poor service go out of business. With complex regulation there is way more oppertunity to lie, cheat, steal, minipulate, buy priviledge, suppress competition, etc. When the government has favors to sell, someone will be willing to pay for them...... "the government that governs least governs best"
How exactly does that work? In the free market:
Companies that charge too much go out of business.
Companies that charge too little go out of business.
Companies that provide poor service go out of business.
With complex regulation there is way more oppertunity to lie, cheat, steal, minipulate, buy priviledge, suppress competition, etc.
When the government has favors to sell, someone will be willing to pay for them......
"the government that governs least governs best"
Some regulation is necessary, environmental pollution and product safety laws come to mind. Recall that it was Nixon (a free-market republican) who signed the original Clean Air Act into law, and that car manufacturers did not care much about safety until after Unsafe at Any Speed was written. Service equality comes into mind too, even though they lasted far too long and nearly caused the death of the railroad industry in the 1970s there were legitimate reasons for the creation of the Elkins and Hepburn Acts (railroad regulation and the ICC) back before the First World War.
Also in setting wages and working conditions there are two sides: Owners (shareholders) and workers. In large businesses the owners most often do not have time to run the business themselves, so they hire managers to do it for them. Likewise in a unionized environment the workers choose (elect) representatives to do the negotiating for them.
So there we have it: Owners represented by management, workers represented by unions. Therefore unions are a part of the free market.
Greetings from Alberta
-an Articulate Malcontent
Convicted One greyhounds There was, and is, absolutely no valid economic reason to economically regulate motor freight. Fews things in life happen for absolutely no reason. For instance you might have past precedents of corrupt or abusive business practices that regulation was designed to limit (or in some really corrupt instances, promote). Not sayimng that i am a big fan of regulation, just that in some instances it serves a better purpose than "let the advantaged prey"
greyhounds There was, and is, absolutely no valid economic reason to economically regulate motor freight.
Fews things in life happen for absolutely no reason. For instance you might have past precedents of corrupt or abusive business practices that regulation was designed to limit (or in some really corrupt instances, promote). Not sayimng that i am a big fan of regulation, just that in some instances it serves a better purpose than "let the advantaged prey"
The reason for economic regulation was to the benefit of existing carriers verses entrpreneurial people, safety, and the shipping public. Prior to 1980 one couldn't start a trucking business without a hard to get "operating authority" Usually the applicant had to prove a need that wasn't currently being met in the marketplace, and established carriers had the opportunity to oppose the application. Often the applicant needed to grease/pay off someone under the table in order to get into the game (some politicians got rich that way).. or better yet.. the applicant had a friend in organized crime that could get the application fast tracked. Regulations were in place to protect the establishment from high energy people with ambition who would be happy to compete based on supply and demand.
Granted the system prior to 1980 worked well if you were lazy and not terribly bright. Anyone with an operating authority couldn't help but make money, so what if the service was lousy. Buy an old truck and hire someone..anyone.. didn't really matter if he could drive or not because you could have 49 driver's licences...i.e if your WI licence expired then you ran on your MN licence.. and if you hit a pedestrian and lost your MN licence, no matter, you still had NY, CT, CA etc.. Not that the laws were all that stringent.. speeding tickets were a standing joke as was the driver's "lie book".. Yup.. the good old days.. when one could get away with almost anything to the detriment of safety, the poor shippers who had to pay rates that were often way over market, and people who wanted to compete but couldn't because they were kept out through regulatory barriers to entry.. (a command economy that would have made Russia proud)..
Wow..what an eye opening posting. Way to go!
One of the main reasons so many trucker fought deregulation: For many of the companies, a very large proportion of their capital assets consisted of their operating rights. With deregulation, many of the smaller companies became wildly over-capitalized with a stroke of a pen.
I'm not so sure we appreciate the Teamster's grip on the industry either - for better or worse, a guy who started loading trailers at age 18 and started driving at age 21 could retire at age 48 with a $39,000 a year pension and lifetime health benefits in early 1990's when I was last conversant with the details. Unlike the railroads, it was (then) difficult to cut down on "crew size" for a semi.
CatFoodFlambeUnlike the railroads, it was (then) difficult to cut down on "crew size" for a semi.
By going to driverless trucks? I don't think you are suggesting that there were more than one driver per truck. Or did the teamsters prohibit multitrailer operation? A lot of trucking used to be LTL, (Less Truck Load) similar to REA but using trucks between terminals. Truck load shipments were the cream and fought for. I don't recall any trucks having "featherbeding" agreements. Or were there onerous milage pay clauses?
Right - it looks as if driverless trucks are on the horizon (at least to a degree) Of course, you could not replace the single driver (as the railroads did with firemen and brakemen. In the Eastern US, the Teamster road-haul drivers did make extra for pulling twin 45/48 trailer on the IN/OH/NY/MA turnpikes, but the real money was in the 15 minutes of pay for dropping or hooking up a trailer. We had a senior driver that was pulling down over $100,000 a year in the late 1980 - he'd pull two trailers out to the "pike" from our Syracuse terminal, take them to Utica, NY, drop one, pick up one, then to Albany, NY, drop the other, hook another, drop both at Springfield, MA, and reverse the process on the way home. Of course I might agree that trying to link up "a road train" in a good lake-effect snowstorm on a zero degree night might have justified the pay. There was some degree of featherbedding - probably the most onerous was the prohibition of using road men to drop trailerloads within the local terminal zone - if we brought in a trailerload destined one block out of his direct route into the terminal, the road man had to take it into the terminal and we had to bring in a local P&D driver to take to trailer to the customer. If a road man came into the terminal, he punched a time clock and parked his/her rump in the break room (on the clock) while we had to take a local man off the dock to drop the inbound trailer, hook the outbound trailer, and fuel the tractor. All that's long gone...
I assumed that the regulation of Trucking was forced on the trucking industry by the railroads to make them pay there "fair share" I guess I was wrong and that the Trucking Industry itself did not too many players on the field at one time. The Taxicab buisness was regulated by the municpilaities that they ran thru to crack down on Jitneys in responce to Streetcar companies complaining that the jitneys were stealing their riders. Now we have gone full circle with Cities embracing Uber who picks up riders on bus lines that have low ridership and do not justfy running a regular schedule. Taxicab Operators are protesting Uber but forgot why they were granted a regultory monopoly in the first place.
ATLANTIC CENTRALHow exactly does that work? In the free market:
Couple thoughts:
There is an old business axiom that states "your most dangerous competitor is the complete fool who will bankrupt himself trying to take business away from you, thinking he is winning"
In your scenario where 'companies that charge too little go out of business' How long are legitimate competing operators expected to suffer the fool who is cutting his own throat without even knowing it? I mean, there you are trying to run an honest business, you have loan payments, cost of facilities, equipment, payroll, etc and trying to compete with you is this fool taking all the business he can away from you, but at a loss. How long are you expected to endure this? Long enough that your own creditors call you to the table? What if the guy isn't a fool afterall, but has sufficiently deep pockets that his plan for success is to starve you out, then own the market....is that fair to the customers in the long run?
Seperately, I for one believe that it is a good thing that carriers of hazardous freight are required to carry higher levels of liability insurance limits than the guys toting groceries. Leaving it to what I guess you would call "market conditions", anyone hauling hazardous material that is dumb (or dishonest) enough to underinsure who then goes on to incur a substantial casualty loss, ultimately pays for his mistake when he goes bankrupt under the weight of litigation from injured parties suing him? Don't the innocent deserve pre-emptive protection, or is that the risk they took living in the same world with the defendant?
Quick question: If my cost to produce one bushel of apples is $2, and the market selling price for apples is $5/bushel, but I sell you a bushel of apples for $4, what is my net? Just curious where your head is at on that one.
Convicted One ATLANTIC CENTRAL How exactly does that work? In the free market: Couple thoughts: There is an old business axiom that states "your most dangerous competitor is the complete fool who will bankrupt himself trying to take business away from you, thinking he is winning" In your scenario where 'companies that charge too little go out of business' How long are legitimate competing operators expected to suffer the fool who is cutting his own throat without even knowing it? I mean, there you are trying to run an honest business, you have loan payments, cost of facilities, equipment, payroll, etc and trying to compete with you is this fool taking all the business he can away from you, but at a loss. How long are you expected to endure this? Long enough that your own creditors call you to the table? What if the guy isn't a fool afterall, but has sufficiently deep pockets that his plan for success is to starve you out, then own the market....is that fair to the customers in the long run? Seperately, I for one believe that it is a good thing that carriers of hazardous freight are required to carry higher levels of liability insurance than the guys toting groceries. Leaving it to what I guess you would call "market conditions" anyone hauling hazardous material that is dumb (or dishonest) enough to underinsure who then goes on to incur a substantial casualty, ultimately pays for his mistake when he goes bankrupt under the weight of litigation from injured parties suing him? Don't the innocent deserve pre-emptive protection, or is that the risk they took living in the same world with the defendant? Quick question: If my cost to produce one bushel of apples is $2, and the market selling price for apples is $5/bushel, but I sell you a bushel of apples for $4, what is my net? Just curious where your head is at on that one.
ATLANTIC CENTRAL How exactly does that work? In the free market:
Seperately, I for one believe that it is a good thing that carriers of hazardous freight are required to carry higher levels of liability insurance than the guys toting groceries. Leaving it to what I guess you would call "market conditions" anyone hauling hazardous material that is dumb (or dishonest) enough to underinsure who then goes on to incur a substantial casualty, ultimately pays for his mistake when he goes bankrupt under the weight of litigation from injured parties suing him? Don't the innocent deserve pre-emptive protection, or is that the risk they took living in the same world with the defendant?
First, let me say I only have limited time and energy for this response...
Yes, regulation in regard to safety is necessary and desireable - insurance, training, operational standards, etc.
"fair" pricing - Maryland has a fair pricing law regarding gasoline, it is against the law to sell gasoline at a loss in the State of Maryland. Be it as a promotion or to crush your competition.
BUT, we let all kinds of businesses do it all the time. Here is one of my pet peeves, reduced airline fares to fill planes. Buy your ticket today, it is one price, buy it 4 days later it is three times as much. Buy it from this guy it is cheaper as part of your "vacation package".
Yet if some other industries did that, there would be hearings in Washington.
Businesses with deep pockets and no debt will always do better than those running on borrowed money - look at AMWAY, never borrowed a dime in their history, one of the strongest private companies in the world - no, I don't sell AMWAY.
But I have been self employed most of my life.
I have no issuse with those who sell for less, they know what their work is worth......
In the broad sense, strict price regulation is never a good thing. BUT, fair pricing laws, like proventing airlines from selling one seat for $400 and the one next to it for $40 - that would be a good idea.
There is no argument that defends airline pricing and regulated freight rates at the same time - which way do you want it?
As to the apple question, do you want the "accountant" crap or the real truth?
Businesses sell stuff below market all the time, for a long list of complex reasons I don't feel like going into right now.
My daddy taught me, "the value of anything is only determined by how much one party wants it, and how much the other party wishes to be rid of it".
Should businesses be prevented for being preditory? To some degree yes - like the airline fares......
Should they be required to have safe equipment and operations, proper employees and insurance, of course.
Much more than I have just described amounts to the goverment controlling the means of production.....
My time is up,
Sheldon
ATLANTIC CENTRALdo you want the "accountant" crap or the real truth?
I wanted to know what you believe.
Convicted One ATLANTIC CENTRAL do you want the "accountant" crap or the real truth? I wanted to know what you believe.
ATLANTIC CENTRAL do you want the "accountant" crap or the real truth?
I told you elsewhere in my reply, regardless of what others may be willing to pay, or be charging, if you sell them to me for $4, you are conceeding that at that moment for whatever reasons, the apples are only worth $4 to you, and you are "happy" with $2 net.
Maybe you have too many apples, maybe you think they will go bad before you sell them all, maybe you just like me, maybe you know or believe I only have $4 and $2 is better than rotten apples.........
ATLANTIC CENTRALHere is one of my pet peeves, reduced airline fares to fill planes. Buy your ticket today, it is one price, buy it 4 days later it is three times as much. Buy it from this guy it is cheaper as part of your "vacation package". Yet if some other industries did that, there would be hearings in Washington. In the broad sense, strict price regulation is never a good thing...(edit for response)... BUT, fair pricing laws, like proventing airlines from selling one seat for $400 and the one next to it for $40 - that would be a good idea.
No, it would be a terrible idea.
Basically, what you're ignoring is an important element of pricing, elasticity. The airlines aren't serving one uniform market for travel. A sales representative who has an urgent need for a face to face meeting with an important customer is going to fly. A woman who wants to go visit her sister in another city will be far less inclined to fly unless she finds a bargain fare. The airline doesn't want unsold inventory, i.e. empty seats.
One uniform fare doesn't fit all. Where would it be set? One fare level would underprice the sales rep and overprice the woman going to visit her sister. The airline would end up with empty seats and lost income. The sales rep would go, but the woman wouldn't get to visit her sister. This would lower her standard of living. Bad idea.
Under regulation, when one fare fits all was the rule, 45% of airline seats flew empty.
Elasticity based pricing is very necessary in transportation. That was even recognized by the dummies at the Interstate Commerce Commission. Think of the classification rates charged by Carolina Freight Carriers. One ICC failure (just one of them) was that they failed to recognize that elasticity changes.
greyhounds ATLANTIC CENTRAL Here is one of my pet peeves, reduced airline fares to fill planes. Buy your ticket today, it is one price, buy it 4 days later it is three times as much. Buy it from this guy it is cheaper as part of your "vacation package". Yet if some other industries did that, there would be hearings in Washington. In the broad sense, strict price regulation is never a good thing...(edit for response)... BUT, fair pricing laws, like proventing airlines from selling one seat for $400 and the one next to it for $40 - that would be a good idea. No, it would be a terrible idea. Basically, what you're ignoring is an important element of pricing, elasticity. The airlines aren't serving one uniform market for travel. A sales representative who has an urgent need for a face to face meeting with an important customer is going to fly. A woman who wants to go visit her sister in another city will be far less inclined to fly unless she finds a bargain fare. The airline doesn't want unsold inventory, i.e. empty seats. One uniform fare doesn't fit all. Where would it be set? One fare level would underprice the sales rep and overprice the woman going to visit her sister. The airline would end up with empty seats and lost income. The sales rep would go, but the woman wouldn't get to visit her sister. This would lower her standard of living. Bad idea. Under regulation, when one fare fits all was the rule, 45% of airline seats flew empty. Elasticity based pricing is very necessary in transportation. That was even recognized by the dummies at the Interstate Commerce Commission. Think of the classification rates charged by Carolina Freight Carriers. One ICC failure (just one of them) was that they failed to recognize that elasticity changes.
ATLANTIC CENTRAL Here is one of my pet peeves, reduced airline fares to fill planes. Buy your ticket today, it is one price, buy it 4 days later it is three times as much. Buy it from this guy it is cheaper as part of your "vacation package". Yet if some other industries did that, there would be hearings in Washington. In the broad sense, strict price regulation is never a good thing...(edit for response)... BUT, fair pricing laws, like proventing airlines from selling one seat for $400 and the one next to it for $40 - that would be a good idea.
I agree, my point to convicted one is simply you can't have it both ways.
And while I do agree airlines should be able to charge whatever they want, just like anyone in a free market, the extreems in that business smack of "usury".
I understand why it is that way, but if we are talking about "playing fair" which was at the heart of convicted one's original comments, then airlines fail the "fairness" test just like the guy with deep pockets who undercuts his competition.
But, I have no dog in this fight, my lifestyle virtually never requires me to get on an airplane......
ATLANTIC CENTRAL you are conceeding that at that moment for whatever reasons, the apples are only worth $4 to you,
i'd be losing $1. If market rate was $5 and Somehow settled for less, I'd be losing the concession I "gave" you.
BTW, I can find no empirical proof that uninsured drivers drive any less safely than insured ones, so I cannot accept that the requirements for additional coverage based upon the nature of the cargo, as they are written, are a safety regulation. The requirement mandating additional expediture for the purpose of risk management is purely an economic one.
Convicted One ATLANTIC CENTRAL you are conceeding that at that moment for whatever reasons, the apples are only worth $4 to you, i'd be losing $1. If market rate was $5 and Somehow settled for less, I'd be losing the concession I "gave" you. BTW, I can find no empirical proof that uninsured drivers drive any less safely than insured ones, so I cannot accept that the requirements for additional coverage based upon the nature of the cargo, as they are written, are a safety regulation. The requirement mandating additional expediture for the purpose of risk management is purely an economic one.
I knew that would be your answer. How many businesses have run? You don't have anything until you sell the apples, it is not a forgone conclusion that you will sell them, no matter the market rate. And apples are pretty "time sensitive".....
Just like the stock market, you don't make or loose anything until you sell.
But what do I know, I was just running the train department in a hobby shop at age 19, managing multi million dollar construction projects by 24, ran my own MATCO tool truck for 8 years, have invented and marketed several products, own rental properties, and run a historic restoration and residential design/construction business. Been self employed for more of my 60 years than I have "worked" for a paycheck.....
ATLANTIC CENTRALI told you elsewhere in my reply, regardless of what others may be willing to pay, or be charging, if you sell them to me for $4, you are conceeding that at that moment for whatever reasons, the apples are only worth $4 to you, and you are "happy" with $2 net. Maybe you have too many apples, maybe you think they will go bad before you sell them all, maybe you just like me, maybe you know or believe I only have $4 and $2 is better than rotten apples.........
One very often sees reduced prices on "soon to expire" items in a grocery store.
So $2 profit is far better than a $2 loss when I have to dump those apples in the trash. Even if I sell them for $2 a bushel, I've at least covered the wholesale cost of the apples.
And you can't forget the "loss leader" concept. I may make a dollar less selling the bushel of apples for $4, but I'm going to more than make that up when you buy caramel and sticks for candy apples, canning supplies (apple sauce), and baking supplies for pies and tarts (not to mention ice cream and some good, sharp cheddar), all at regular (and possibly even slightly increased) prices.
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
ATLANTIC CENTRALI knew that would be your answer. How many businesses have run? You don't have anything until you sell the apples, it is not a forgone conclusion that you will sell them, no matter the market rate. And apples are pretty "time sensitive"..... Just like the stock market, you don't make or loose anything until you sell. But what do I know, I was just running the train department in a hobby shop at age 19, managing multi million dollar construction projects by 24, ran my own MATCO tool truck for 8 years, have invented and marketed several products, own rental properties, and run a historic restoration and residential design/construction business. Been self employed for more of my 60 years than I have "worked" for a paycheck.....
Well, you certainly have plenty of ambition. Good for you.
The argument that the apples are only worth what I choose to sell them for, sounds like the product of a liberal arts background? Assuming that the market rate is $5, wouldn't I be charging others $5? By giving you a break (if I so chose) I would most certainly be losing the dollar I could have been charging others.
Or I could just donate the aples to the local soup kitchen, and write them off at full value against my other sales. So much for time sensitive.
greyhounds I said: "There was, and is, absolutely no valid economic reason to economically regulate motor freight." And there isn't.
Absolutes are sticky critters. I try to avoid them whenever possible.
Anyone with ambition and access to capital can open a trucking business. And in the instances where that person is also a fool, can inflict serious harm onto legitimate operators. To the extent that regulation levels the playing field and shelters legits from the posers, it CAN serve a valid purpose.
Duplicate.
Convicted OneBTW, I can find no empirical proof that uninsured drivers drive any less safely than insured ones,
I'm retired from Allstate Insurance. The statistics I learned were that one out of eight drivers was uninsured, but that those drivers were involved in one out of six accidents. That makes an uninsured driver significantly more likely to be involved in an accident than an insured driver.
Driving without insurance is risky behavior. This predilection to risky behavior will spill over to driving habits. And to other behaviors such as use of credit.
greyhoundsDriving without insurance is risky behavior. This predilection to risky behavior will spill over to driving habits. And to other behaviors such as use of credit.
My scanner is on 24/7, mostly for fire, but I listen to law enforcement as well (sometimes I can get a heads up on a fire response that way). I never cease to be amazed at the number of people who get pulled over that have a sometimes long list of previous offenses, and/or outstanding tickets.
As you say - those prone to risky behavior tend to participate in them. Ever notice the concentration of smokers in bars???
Convicted One ATLANTIC CENTRAL I knew that would be your answer. How many businesses have run? You don't have anything until you sell the apples, it is not a forgone conclusion that you will sell them, no matter the market rate. And apples are pretty "time sensitive"..... Just like the stock market, you don't make or loose anything until you sell. But what do I know, I was just running the train department in a hobby shop at age 19, managing multi million dollar construction projects by 24, ran my own MATCO tool truck for 8 years, have invented and marketed several products, own rental properties, and run a historic restoration and residential design/construction business. Been self employed for more of my 60 years than I have "worked" for a paycheck..... Well, you certainly have plenty of ambition. Good for you. The argument that the apples are only worth what I choose to sell them for, sounds like the product of a liberal arts background? Assuming that the market rate is $5, wouldn't I be charging others $5? By giving you a break (if I so chose) I would most certainly be losing the dollar I could have been charging others. Or I could just donate the aples to the local soup kitchen, and write them off at full value against my other sales. So much for time sensitive.
ATLANTIC CENTRAL I knew that would be your answer. How many businesses have run? You don't have anything until you sell the apples, it is not a forgone conclusion that you will sell them, no matter the market rate. And apples are pretty "time sensitive"..... Just like the stock market, you don't make or loose anything until you sell. But what do I know, I was just running the train department in a hobby shop at age 19, managing multi million dollar construction projects by 24, ran my own MATCO tool truck for 8 years, have invented and marketed several products, own rental properties, and run a historic restoration and residential design/construction business. Been self employed for more of my 60 years than I have "worked" for a paycheck.....
Well you missed the mark there, no liberal arts education here, if fact no college degree at all. Some college level education, but no degree past Severna Park High School.
Socially moderate regarding others, morally conservative in my own choices, politically and fiscally conservative.
Just all that real life experiance and knowing how to read.......
You set the parameters of the $4 sale, not me.
Guys,
The apples are only worth what a serious buyer is willing to pay for them.
Norm
Convicted One By giving you a break (if I so chose) I would most certainly be losing the dollar I could have been charging others.
To my mind, you're not losing money until you sell them for less than $2. At $4, you're not making the full potential profit, but you're not losing money.
tree68 greyhounds Driving without insurance is risky behavior. This predilection to risky behavior will spill over to driving habits. And to other behaviors such as use of credit. My scanner is on 24/7, mostly for fire, but I listen to law enforcement as well (sometimes I can get a heads up on a fire response that way). I never cease to be amazed at the number of people who get pulled over that have a sometimes long list of previous offenses, and/or outstanding tickets. As you say - those prone to risky behavior tend to participate in them. Ever notice the concentration of smokers in bars???
greyhounds Driving without insurance is risky behavior. This predilection to risky behavior will spill over to driving habits. And to other behaviors such as use of credit.
tree68At $4, you're not making the full potential profit, but you're not losing money. My 2 Cents
The concept is known as "the dollar left on the table". It's not a new concept. The question is sort of a litmus test in Entrepreneurship 101, to see where the student's head is at. If you have an employee working for you in a position of responsibility who answers "you double your money"...you have a problem.
greyhoundsDriving without insurance is risky behavior. This predilection to risky behavior will spill over to driving habits.
Do you think that if said individuals bought insurance, doing so would reform their personal behavior? (chicken vs egg)
ATLANTIC CENTRALYou set the parameters of the $4 sale, not me.
Even so, the "$4 sale" DOES NOT set the value of the goods sold. Let me give you a real world example from my recent experiences.
Recently at an estate sale I purchased a vintage Marantz receiver for under $100. It comes from their golden era, and was one of the most powerful units they ever sold. And it was in cherry condition cosmetically.
I took it to a shop, had the pots cleaned, a complete diagnostic check performed, a little bit of repair work to the internal power supply....all together I have less than $250 into it.
They guy who serviced it offered me $2,200.00 for the unit.
Now the people who sold me the unit for less than $100 had zero impact upon the actual value of this unit. The seller's ignorance about what they were selling cost them big time.
In the apple example which I shared with you, I'd be giving you $1 charity, assuming I had no ulterior motive.
Convicted OneDo you think that if said individuals bought insurance, doing so would reform their personal behavior? (chicken vs egg)
Well, no. But that's not what you said. You're changing your tune.
You said: "I can find no empirical proof that uninsured drivers drive any less safely than insured ones".
I pointed out that Allstate Insurance, a company that studies and analyzes accident rates in great detail, has determined that uninsured drivers have accident rates significanly in excess of insured drivers.
You're now back with: "would buying insurance change behavior?" You've totally changed the issue.
Convicted One tree68 At $4, you're not making the full potential profit, but you're not losing money. My 2 Cents The concept is known as "the dollar left on the table". It's not a new concept. The question is sort of a litmus test in Entrepreneurship 101, to see where the student's head is at. If you have an employee working for you in a position of responsibility who answers "you double your money"...you have a problem.
tree68 At $4, you're not making the full potential profit, but you're not losing money. My 2 Cents
That's all great in the class room, how many years have you earned a living being self employed? Remember, I asked you in the beginning which answer you wanted. I know both answers and the thinking behind them. I also have 40 years experiance "on the street".
Look at the model train market, prices are all over the map for the same products. Just like your stereo seller, some people pay too much, others will not buy except at the lowest common street price. So what is the "market" for a Bachmann 2-8-2? dozens will sell this week for a wide range of prices. The seller has to weigh a number of factors to determine where HE wants to be, how long he wants to tie up money, how much work he wants to do to make a sale. It is a lot more complex than just "the dollar left on the table".
But again, what do I know......
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