On Tuesday, May 28, 2002 12:25 AM John Perich [EMAIL PROTECTED] wrote: > (Yes, I know, the Austrians on the list would kill me for assuming cost > dictates price, rather than the other way around. But it's just awkward to > state it the right way. :) )
Wouldn't it be more accurate to say that an entrepreneur must find a price above cost in order to make it worth her or his while to make the product? Of course, this is based on predictions -- that the price will be at or above the expected price and the cost will be at or below the expected cost -- which can be and often enough are wrong. I.e., a good or service won't be produced over the long run, if it can't sell enough above cost to make it worth someone's while to provide. This would apply to things like toilets where the cost is bundled with other good and services. The business owner still needs to make enough profit above the cost of the toilet to make it worth her or his while -- or, more accurately, believe this will be the case. This, I believe, captures the Austrian position, though I'm not sure if non-Austrians don't hold the same view. Any takers? Cheers! Dan http://uweb.superlink.net/neptune/ "... the goal for all art... is to explain to the artist himself and to those around him what man lives for, what is the meaning of his existence. To explain to people the reason for their appearance on this planet; or if not to explain, at least to pose the question." -- Andrei Tarkovskii
