Trains and Turkeys

[John WR]

schlimm

Loss leader is an old technique in retail.  They blieve they will make their profit on all the other stuff for T-giving (usually do)..

We seem to agree here Schlimm that classical economic theory does not always explain the prices we consumers encounter when we go to buy something.  I'm happy enough to buy a loss leader whenever I can but I try to avoid the opposite, paying a high price because I left my purchase to the last minute.   These days I try to by Amtrak tickets a month or so in advance when prices are a lot lower.   

Back in the days when I could just walk up to the ticket window any time I wanted, even the day before Thanksgiving, and pay the same price for a train ticket as any other day I was really getting an unintended loss leader.  I'm still surprised at how much Amtrak prices for tickets to the same place can vary.  On the other hand, I know Amtrak has increased its revenues significantly with its current system and I am happy about that.  

John

[schlimm]

John WR

In my mind's eye I can still see my economics teacher with his supply and demand curves on the black board explaining why when demand goes up the price has to go up too.  So high Amtrak prices right now make sense.  But how come turkey prices are so low?  Was my teacher just plain mistaken?

Loss leader is an old technique in retail.  They blieve they will make their profit on all the other stuff for T-giving (usually do)..

[Paul of Covington]

   It's common for people to complain about how often weather forecasters are wrong, but for some time now I've been convinced that economists generally know even less about the economy.

[John WR]

Anyone who wants to go from New York to Boston for Thanksgiving diner on Amtrak should hurry.   Today (Saturday) and tomorrow you can get a one way ticket for $73 on some Northeast Regional Trains.  After that the lowest price is $104 and it can be a lot higher.  On Wednesday some afternoon trains are sold out and on Thanksgiving day a morning train is sold out.

Since this is the busiest time of the year the law of supply and demand easily explains Amtrak fares for the next few days.   But then there are turkeys.  Right now the demand for turkeys is at its highest point in the year too so prices should be high.  But they are not.   In fact my local supermarket will give me a turkey absolutely free.  All I have to do is to go over and pick it up.   

In my mind's eye I can still see my economics teacher with his supply and demand curves on the black board explaining why when demand goes up the price has to go up too.  So high Amtrak prices right now make sense.  But how come turkey prices are so low?  Was my teacher just plain mistaken?