Comment by pixl97

4 days ago

Yes, this is why the prices of housing has dropped dramatically. The market stepped up and filled the demand needed and now everyone can afford a place to live

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5 comments

pixl97

Reply
torton  4 days ago

The housing market is a textbook example of the opposite of a free market. In most markets, anything that does not "improve the character of the neighbourhood" is impossible to build by design.

  • pixl97  4 days ago

    Most chunks of the computing market should be thought of as a text book example of a 'free' market that operates with collusion with the few well monied "competitors" ensuring they don't put each other out of business.

    Lets say you wanted to jump into the hard drive producing market. It's going to take you a few years to get there and a lot of billions of dollars. By the time you're close to producing units the existing players will suddenly drop the prices to the point where you cannot produce profits for as long as they need to. Aka, your competitors can collude longer than you can remain solvent. And yes, in two decades you will win the court case against them. And other than a fine nothing will happen because they're are so few manufactures that they are too big to fail.

    • zozbot234  4 days ago

      The better way of putting it is that collusion is ultimately limited by the ease of entry into and exit from the market. The existing players don't need to "suddenly" drop the prices when a new entrant appears, because they've been doing that already.

      It's only when supply bumps into short-term capacity constraints and price must rise enough to fully ration demand that this assumption fails. But then even if a new entrant appears that's no reason to drop prices unsustainably, because why would you? They're not taking any share of the market away from you, they're serving new demand.

xpe  4 days ago

I can't tell if the comment is above is sarcastic or serious: it could go either way.

  • pixl97  4 days ago

    This is 100% serious as it has not gone this way in the US. Housing prices keep going up in general and NIMBYism has stopped a massive amount of density growth.