On Friday 31 December 2010 08:55 AM, Binand Sethumadhavan wrote:
2010/12/30 Ronygnulinuxist@gmail.com:
taxiwala overcharges a few rupees during a taxi shortage, he is considered a criminal who should be severely punished. If airline companies form a cartel, create artificial shortage and extremely overcharge their customers, they are respectable blue collared businessmen who simply call it the laws of 'supply and demand'.
First of all, I think you mean "white collared businessmen". :-)
Yes. Thanks for pointing it out.
Third, the laws of supply and demand as taught in introductory economics courses assume "many suppliers and consumers" that one or a group of them cannot control the price - which obviously doesn't hold true in the case of a cartel. The airline bosses are taking the travelling public for a ride (pun intended) when they use these laws to justify their actions.
One of the head honchos had actually used the term 'supply and demand' in his statement to justify the high ticket prices.
The concept of profit goes through three distinct phases:
You have painstakingly explained it. Thanks. :-)