In article >, Hawk wrote:

Ya think you could post in 80 columns?

> "Brent P" wrote in message:
>> Does a fixed allotment create scaricty? Yes or no.

> No...because the number of cars Ford ultimately builds has no correlation to how
> they are spread around to the various dealers. If they plan to build 7000
> GT500's, the scarcity is determined by how many people want to buy one. If nobody
> wanted one...they could build 100 and they wouldn't be considered scarce from a
> buyers perspective.

So if they sent one to chicago and 6999 to europe that wouldn't create
scarcity in the USA?

The fixed allotments do create scaricity because they can never be 100%
accurate with regard to where the buyers are. Unless of course you see it
as easy for buyers to purchase vehicles on the other side of the nation.
Nor are all the vehicles entering the market at once.

Above you need to assume that all 7000 are on the market at once and that
buyers and sellers have no geographic restrictions.

> Again we are back to standard market forces...

No, because of the assumptions needed above are not practical.

Now, if instead of allotments to dealers, dealers could take orders
for vehicles for future delivery, then that would simulate the conditions
you've outlined fairly well. The entire production would hit the market
at the same time on paper. Virtually as it were. The order books would be
open until X value were reached or whatever limiting factor ford used and
having the cars sent to where they are ordered, then yes you'd have
standard market forces as you described them.

Allotments could easily have buffalo dealers stuck with the cars all
winter and dealers in LA with buyers but no cars.