Ya'll need to understand fundamental Supply and Demand

[Amias]

How Does the Law of Supply and Demand Affect Prices?

 

Quote

The law of supply and demand is an economic theory that explains how supply and demand are related to each other and how that relationship affects the price of goods and services. It's a fundamental economic principle that when supply exceeds demand for a good or service, prices fall. When demand exceeds supply, prices tend to rise.

 

There is an inverse relationship between the supply and prices of goods and services when demand is unchanged. If there is an increase in supply for goods and services while demand remains the same, prices tend to fall to a lower equilibrium price and a higher equilibrium quantity of goods and services. If there is a decrease in supply of goods and services while demand remains the same, prices tend to rise to a higher equilibrium price and a lower quantity of goods and services.

 

 

The same inverse relationship holds for the demand for goods and services. However, when demand increases and supply remains the same, the higher demand leads to a higher equilibrium price and vice versa.

 

Demand is increasing. Supply is not.

 

People are not price gouging, scalping or ripping anyone off. This is core, basic economics at play.

 

Supply of many very complex goods, requires expensive complex manufacturing and supply chain management. On razor thin margins, any misstep can result in bankruptcy, so supply is balanced carefully to not exceed the demand. When the demand increases significantly in a short period, the resulting impact to supply is slow and takes time. Meanwhile natural price increases occur. If this doesn't happen at the supplier end of the chain, and only within the middlemen (distributers), then the suppliers can't expand production rates.

 

Costs are going up people, and we should be grateful when the suppliers reflect the demand. Not the middlemen. That allows them the margin to increase supply so they can eventually build up production capacity to meet the demand. 

 

We all know the recent new product announcement and outrage OUTRAGE at the price. I'm sorry but if they don't increase the price substantially, we'll never see supply start to meet the demand and our high end hobbies will die out. I'm extremely disappointed at the outrage perpetuated by many leading tech journalists that can't see the market for what it is and understand basic economics. Maybe they're isolated from the sheer frustration of the actual consumers due to getting overloaded with review samples and first dips on products 99% of people can't touch. Maybe they're not doing their job properly. Maybe they need to do their job properly and report on the current market fairly and educate their viewers to keep expectations in check.

 

 

[Spotty]

5 minutes ago, Amias said:

People are not price gouging, scalping or ripping anyone off.

Oh, so people aren't lining up at Best Buy to buy a graphics card for $800 so that they can immediately sell it on Craigslist for $1500?

 

This is going to be an interesting thread...

[Murasaki]

8 minutes ago, Spotty said:

Oh, so people aren't lining up at Best Buy to buy a graphics card for $800 so that they can immediately sell it on Craigslist for $1500?

 

This is going to be an interesting thread...

Lining up is so 2019, bots are the trend now.

[Eigenvektor]

22 minutes ago, James Evens said:

Can't wait for the Boston dynamic (insert any shortage: GPU, wood, screws, paper, ...) queuing bot.

Hm… Cue the Boston Dynamics bot shortage (~edit: oops, unintentional pun)

[Avocado Diaboli]

1 hour ago, Amias said:

People are not price gouging, scalping or ripping anyone off. This is core, basic economics at play.

Yes they are, that's what buying something at retail price and immediately putting it on Ebay for more is. But price gouging is part of the supply/demand model, it's nothing new and there are specific laws in place in many areas that prohibit this. Look up the term "antitrust", especially before trying to educate people on fairly basic economic concept that everybody already understands. Chances are when people complain about these practices, it's not that they don't understand what's happening. They just have legitimate grievances over the fact that it's happening at all. 

[LogicalDrm]

1 hour ago, Amias said:

People are not price gouging, scalping or ripping anyone off. This is core, basic economics at play.

1 of 3 is correct. Gouging is something thats not happening here at all as that term is purely for essential good, such as food and medical equipment. Scalping is a thing, it means reselling retail items for high prices because demand is high. Retailers rising pricing because of high demand is not scalping by itself, but the prices could still be referred as "scalper prices" with good reasons.

 

"Ripping off" is the tricky one. The meaning from Google says its to cheat and gain financially. So its not the term to be used at all in this conversation. Only people who are scamming are ripping off. From others, maybe manufacturer itself is ripping people off by asking more than their stuff is actually worth. Still, wouldn't be using it in this discussion at all.

 

Also, asking people to understand economics? When they don't understand basic terms?

[Amias]

1 hour ago, Spotty said:

Oh, so people aren't lining up at Best Buy to buy a graphics card for $800 so that they can immediately sell it on Craigslist for $1500?

 

This is going to be an interesting thread...

Welcome to Middleman business.

 

Intermediary's

 

Resellers.

 

Scalpers only exist in poorly run markets, in well run markets ... well their just another intermediary. What makes a poorly run market? Company selling products at X price which have street value of 3-4X. Until the supplier addresses the broken market, well ... when it doesn't suit us we don't like we call scalping, when it does suit us we call it retail.

 

Do we call Diamond trade scalping? Do we call luxury one off items scalping? No ... they're just rare (in some cases artificially inflated demand) items.

 

[Amias]

9 minutes ago, LogicalDrm said:

1 of 3 is correct. Gouging is something thats not happening here at all as that term is purely for essential good, such as food and medical equipment. Scalping is a thing, it means reselling retail items for high prices because demand is high. Retailers rising pricing because of high demand is not scalping by itself, but the prices could still be referred as "scalper prices" with good reasons.

 

"Ripping off" is the tricky one. The meaning from Google says its to cheat and gain financially. So its not the term to be used at all in this conversation. Only people who are scamming are ripping off. From others, maybe manufacturer itself is ripping people off by asking more than their stuff is actually worth. Still, wouldn't be using it in this discussion at all.

 

Also, asking people to understand economics? When they don't understand basic terms?

Those are just terms I see constantly thrown around.

 

Gaming Nexus - "At $1200, NVIDIA is opportunistically gouging its customers in a predatory fashion."

 

 

[Amias]

22 minutes ago, Avocado Diaboli said:

Yes they are, that's what buying something at retail price and immediately putting it on Ebay for more is. But price gouging is part of the supply/demand model, it's nothing new and there are specific laws in place in many areas that prohibit this. Look up the term "antitrust", especially before trying to educate people on fairly basic economic concept that everybody already understands. Chances are when people complain about these practices, it's not that they don't understand what's happening. They just have legitimate grievances over the fact that it's happening at all. 

GPU's are not essential. So while the practice falls into 'gouging' the necessity for you to have one does not exist and so the term and act does not apply in most cases of law.

 

Ergo it's just profiteering. 

[gal-m]

14 minutes ago, Amias said:

Company selling products at X price which have street value of 3-4X.

Brand image and public perception goes a long way.. Raising prices just because the market is poorly run isn't as simple as it seems - it can damage a brand's reputation irreversibly @Amias. Basically, things aren't that simple. 

[LogicalDrm]

8 minutes ago, Amias said:

Those are just terms I see constantly thrown around.

 

Gaming Nexus - "At $1200, NVIDIA is opportunistically gouging its customers in a predatory fashion."

You should be yelling that at Steve... They should be using "ripping off" in that sentence. Thats the correct place to use that term.

[Amias]

1 minute ago, gal-m said:

Brand image and public perception goes a long way.. Raising prices just because the market is poorly run isn't as simple as it seems - it can damage a brand's reputation irreversibly @Amias. Basically, things aren't that simple. 

Kind of a moot point when you literally can't make enough product to meet the demand.

 

Some of those companies could literally fire their entire marketing departments right now. Oh ... you think they're going to go AMD ... you can't Buy those cards either!

[Avocado Diaboli]

10 minutes ago, Amias said:

GPU's are not essential. So while the practice falls into 'gouging' the necessity for you to have one does not exist and so the term and act does not apply in most cases of law.

 

Ergo it's just profiteering. 

Switching to arguing semantics instead of economics doesn't change anything about the facts. You act as if it being "just profiteering" is a meaningful distinction to "price gouging", "scalping" or "ripping off", as if there's a moral gradient and you're the one setting the threshold where it's ok to be upset and where not.

[Rex Hite]

"gouging', 'scalping", etc

There's a lot of semantics going on.

A good argument doesn't rely on a dictionary to make a case.

 

And while people are arguing over semantics, there's a food video card shortage and people are suffering...unable to fully enjoy their toys...suffering.

 

 

 

[Whos Sayin]

scalpers provide a useful market function and are a fundamental part of a working economy. 

 

go ahead, lynch me

[Frugivore8894]

53 minutes ago, Whos Sayin said:

scalpers provide a useful market function and are a fundamental part of a working economy. 

 

go ahead, lynch me

WTF dude, no.  

[Whos Sayin]

8 minutes ago, Frugivore8894 said:

WTF dude, no.  

scalpers provide liquidity. it allows those with more inelastic demand to get the cards by pricing out the rest. they are the only reason your able to get a card for any price at all. if your job requires that you have a good card for compute applications, you no longer have to spam refresh and pray to god that you somehow get it before the hordes of manchildren who want 20 more frames on their game. scalpers are the people who stand in line for those who have better shit to do and they charge a fee for their work. scalpers arent causing a worldwide silicon shortage. in a world where there isnt enough cards, there's no reason to want a market out of equilibrium, beside the fact that it's inevitable, the only alternative to finding its market equilibrium price via scalpers or AIBs charging those same scalper prices is for everything to be cheaper and impossible to buy, which will result in there being nothing to distinguish someone who just wants an upgrade and someone who needs the card to earn a living. 

[kelvinhall05]

I have a pretty neutral stance on this as I think both sides are extremely annoying and tiring to listen to. With that being said, I find it amusing how painfully obvious it is who scalps here, and who bought a scalped card (or is unable to buy a card because the only ones available are said scalped ones).

[Beerzerker]

23 minutes ago, Whos Sayin said:

scalpers provide liquidity. it allows those with more inelastic demand to get the cards by pricing out the rest. they are the only reason your able to get a card for any price at all. if your job requires that you have a good card for compute applications, you no longer have to spam refresh and pray to god that you somehow get it before the hordes of manchildren who want 20 more frames on their game. scalpers are the people who stand in line for those who have better shit to do and they charge a fee for their work. scalpers arent causing a worldwide silicon shortage. in a world where there isnt enough cards, there's no reason to want a market out of equilibrium, beside the fact that it's inevitable, the only alternative to finding its market equilibrium price via scalpers or AIBs charging those same scalper prices is for everything to be cheaper and impossible to buy, which will result in there being nothing to distinguish someone who just wants an upgrade and someone who needs the card to earn a living. 

This is some real bullshit being thrown on the wall and sliding right down.
Scalpers provide NOTHING to the market of any value period aside from getting inbetween customers and the vendors to control available supply to jack prices up even higher than before for personal gain and nothing else.

I'll just say it - This guy to me sounds like a scalper trying to spin it into something it's not.
 

 

19 minutes ago, kelvinhall05 said:

I have a pretty neutral stance on this as I think both sides are extremely annoying and tiring to listen to. With that being said, I find it amusing how painfully obvious it is who scalps here, and who bought a scalped card (or is unable to buy a card because the only ones available are said scalped ones).

I'm in neither category, don't need anything new or have bought anything for at least the past two years.
I've got more than enough to make do for years to come.

[Whos Sayin]

1 minute ago, kelvinhall05 said:

I have a pretty neutral stance on this as I think both sides are extremely annoying and tiring to listen to. With that being said, I find it amusing how painfully obvious it is who scalps here, and who bought a scalped card (or is unable to buy a card because the only ones available are said scalped ones).

I don't scalp but but a close friend of mine does, I just don't have the time or patience to sit waiting for new stock to come in and race to get it rather than just working a normal job. 

 

I built my PC last year and got a 1650 super for $170 and it's more than enough for all my games and both my monitors. I think anything above a 1660 is a luxury and completely unnecessary to enjoy games. The tech community just obsesses over new hardware and always uses the most demanding games to show a difference between them like this. 

Of course they tell you the csgo results in one of the slides in a 10 minute video but when you fill up most of it with charts like this one the viewer is swept up in the narrative that it matters for them. For most people, even an iGPU should be sufficient for their 1080p games and even some 1440p games. This chart meanwhile makes the 1050ti look like shit.

[Whos Sayin]

1 minute ago, Beerzerker said:

This is some real bullshit being thrown on the wall and sliding right down.
Scalpers provide NOTHING to the market of any value period aside from getting inbetween customers and the vendors to control available supply to jack prices up even higher than before for personal gain and nothing else.

I'll just say it - This guy to me sounds like a scalper trying to spin it into something it's not.
 

 

I'm in neither category, don't need anything new or have bought anything for at least the past two years.
I've got more than enough to make do for years to come.
 

you responded to nothing i said and just called me a scalper, which not only is not a bad thing, its not even true. like you, i built my pc before the shortage and haven't bought any hardware during it except a monitor back in BF to use myself. also, im curious why you think scalpers are the ones causing shortages. they sell every card they buy and those who buy from them would buy it themselves if scalpers didnt exist. They aren't like some african diamond company that stockpiles cards to slowly trickle in. all they do is stand in line for you. You act like gamers have a divine right to first bid on GPU stock because why exactly?

[Beerzerker]

2 minutes ago, Whos Sayin said:

you responded to nothing i said and just called me a scalper, which not only is not a bad thing, its not even true. like you, i built my pc before the shortage and haven't bought any hardware during it except a monitor back in BF to use myself. also, im curious why you think scalpers are the ones causing shortages. they sell every card they buy and those who buy from them would buy it themselves if scalpers didnt exist. They aren't like some african diamond company that stockpiles cards to slowly trickle in. all they do is stand in line for you. You act like gamers have a divine right to first bid on GPU stock because why exactly?

I said you sounded like one - If I had wanted to call you one I would have and been done with it.
I never said gamers or anyone else had priority either, a customer is a customer and every customer period is impacted by this, gamer or otherwise.
When no one can buy, no one can buy - It's that simple.

[Whos Sayin]

Just now, Beerzerker said:

I said you sounded like one - If I had wanted to call you one I would have and been done with it.
I never said gamers or anyone else had priority either, a customer is a customer and every customer period is impacted by this, gamer or otherwise.

every customer is impacted by the shortage, not scalpers. You can't scalp something that there's a surplus of. Most scalpers just manually try to snatch stock the same as anyone else. There's no reason for everyone to have to play that game if they are willing to pay someone to do it.

[Beerzerker]

10 hours ago, Whos Sayin said:

1: every customer is impacted by the shortage, not scalpers.
2: You can't scalp something that there's a surplus of.

3:Most scalpers just manually try to snatch stock the same as anyone else. There's no reason for everyone to have to play that game if they are willing to pay someone to do it.

1: This I agree with except that scalpers have indeed contributed to the shortages of what's available.

2: If there was a surplus as you say, can you explain why all the vendors have no readily available stocks of them?
Go to Newegg for example, all you see is "Out of stock" and it's been that way for a very long time now. Maybe due to silicon shortages NOW but back when it all started I doubt it.

3: If scalpers do it manually, why do they need the bots? I know a person can't type THAT fast but a bot can and they are used to get all the available stock before anyone else can, if they can - That's the entire purpose of these bots being used in the first place. 

4: Related to earlier.... With what I did post:

 

12 hours ago, Whos Sayin said:

scalpers provide a useful market function and are a fundamental part of a working economy. 

 

go ahead, lynch me

You did ask for it so there is no sense in you complaining about your request being granted.

 

[Sauron]

It's always interesting to see people who think that just because they can explain why something happens then that thing is automatically justified.

11 minutes ago, Whos Sayin said:

every customer is impacted by the shortage, not scalpers. You can't scalp something that there's a surplus of. Most scalpers just manually try to snatch stock the same as anyone else. There's no reason for everyone to have to play that game if they are willing to pay someone to do it.

Aside from the fact that what "most" scalpers do is irrelevant when some get a hold of all the stock using bots, it's very obvious that without scalpers trying to make a profit on something they bought from retail the prices for that stock would be lower for everyone.

 

It doesn't matter how little or how much stock there is, scalpers by definition inflate the prices in exchange for absolutely no benefit. If stock is abundant then scalping becomes impractical, but modern supply chains are just-in-time; it doesn't make sense to produce more than people want to buy, and if scalpers come in to snatch any amount of that stock then the prices will be inflated.

 

I don't think it's reasonable to demand unnecessary and wasteful surplus production just because otherwise some assholes will artificially inflate the prices for personal profit; it should instead be made illegal to engage in this sort of behavior without a license to be a retailer. If you flip a card or two little harm is done, it's the volume that makes a difference and should be regulated accordingly.