Brent P wrote:
> In article >, Michael Johnson, PE wrote:
>
>> The market price of any Ford vehicle is virtually unaffected by dealer
>> allotments.
>
> Rationing affects market price.

You're all over the map. Rationing? WTH are you talking about? This
isn't 1942.

>> The allotment system for popular vehicles is Ford's way of
>> rewarding certain dealers for their performance and not as a way of
>> controlling prices. The price is set by what the consumer is willing to
>> pay.
>
> Yes, it rewards the dealers by rationing the goods which increases their
> price and dealer profit should the dealer do so. If the cars were not
> rationed, the dealers that sold at MSRP would drive down the market
> price. But since they are rationed, the MSRP selling dealerships run
> through their allotments quickly allowing the others to add 20K to the
> sticker.

And this is how ford chooses to operate... IN A FREE MARKET!!! Ford is
not THE market. It is a competitor in the market place.

>> You are applying the free market definition to a very specific company
>> and a very narrow circumstance.
>
> Let's see, you and others are telling me it's the free market and I
> should love it. It's not a free market situation. It's a rationing
> situation.

Your first clue that you are wrong is in your above statement. We are
all wrong and you are right? Is rationing your new buzz word? What was
wrong with allotment? Do you expect Ford to market the GT500 like it
does an F150?

>> You are not obliged to buy a GT500.
>
> I haven't stated otherwise and I am growing quite tired at this continual
> sidetrack of yours. That doesn't change the fact that the additional
> profit dealers are tacking on does not come from a free market situation.

You say there is no free market and I have thoroughly explained that
there is. What is the side track? You do realize Ford operates in a
free market here and has many competitors for all their makes and
models? You think Toyota doesn't maximize profits too. I know the
owner of three Toyota dealerships personally and I can confirm that he
does. They all do it and it is done in a free market. No one dealer or
automaker is the free market on there own. I just don't see what is so
difficult in grasping this concept.

>> You have the ability to choose a Corvette, Mercedes, BMW or any other
>> car you choose as a substitute if you aren't willing to pay a dealer's
>> price.
>
> And that's likely what will happen.

You realize you are part of the free market at work, don't you?

>> This is the free market, or supply and demand, forces at play
>> that really sets the price of a GT500.
>
> But there is no free market between _independently owned_ Ford dealers.

And Ford and its dealers don't constitute a free market on their own.
They are one part of the overall free market system.

>> You need to take off your
>> blinders and see the entire playing field.
>
> I see the whole field thank you very much. Could you please stop
> constructing this strawman?

Straw man? What are you talking about now? Every time you get boxed
into a corner you play the "straw man" card. The only straw man here is
you claiming Ford and its dealers can, and should, operate as a free
market internally.

>> Then you might see how
>> supply and demand, along with the dealer's, and Ford's, right to
>> maximize profits is determining the price of the GT500. This isn't a
>> rare case. It happens with nearly every item we purchase.
>
> Ford isn't maximizing anything but their losses. MSRP is where _FORD_
> thinks it will _MAXIMIZE_ it's profits. If Ford thought that maximium
> profits were at $65K, that's what MSRP would be.

You are once again assuming to know way more than you actually do.
Neither of us know what combination of sales price and volume will
maximize profits. I doubt Ford even knows it until the dust settles.

Ford has decided to sell X number of cars to the dealers for Y price.
They can compute their profits based on these numbers. The dealers are
now trying to maximize their profits by probing the market place with
prices they think will fly based on the current demand. MSRP means
nothing to a dealer right now for the GT500. It is what Ford has stated
is their belief of the car's market value. This isn't based on the
initial demand but over the entire year's production and anticipated
total demand for the car. You make Ford out to be some evil corporation
ripping off its customers when they are just like every other auto
maker. I guess a reasonable profit is OK as long as it meets your idea
of reasonable?

> Then again look who I am discussing this with, someone who thinks highest
> unit price is always maximum profit. It's not.

There you go again, assuming you know way more than you actually do.
Where in this thread have I stated what you just claimed? I took enough
economics courses in college to know the relationship between price,
product quantity, demand and profit. Plus I have owned two businesses
selling goods and services in a competitive market so I know a little
about their combined effect on profits.

BTW, I was looking forward to your rationalization of how you maximizing
your income shouldn't be considered an act of greed on your part. I
thought it might give me some insight regarding why you think dealers
are greedy for maximizing their profits and you, OTOH, are not when
maximizing your income.