Greedy *******s.....

In article >, ZombyWoof wrote:

> http://en.wikipedia.org/wiki/Free_market

"A free market is a market where price is determined by unregulated supply and
demand"

Allotments control supply.

"The law of supply and demand predominates in the ideal free market, influencing
prices toward an equilibrium that balances the demands for the products against the
supplies. At these equilibrium prices, the market distributes the products to the
purchasers according to each purchaser's use (or utility) for each product and within
the relative limits of each buyer's purchasing power."

Allotments do not distriubte the products to the purchasers in that manner.

Just because ford is making the allotments to the retailers rather than the
government doesn't change the fact it deviates from the ideal free market when it
comes to retailers competing with each other for sales.

You can argue all you want about how the car is special, how ford is allowed to do
it, how ford should do it to reward dealers and all your other justifications and
reasons to accept the allotment scheme, but it's irrelevant, because in the end,
allotments short-circuit the ideal free market.

ZombyWoof wrote:
> <snip>
> And you don't generate additional profit for yourself? Do you work
> for minimum wage? So you have an objection, who knows what the basis
> is because you don't even know what a "Free Market" truly is anyway.
> No one has yet to weigh in on this discussion agreeing with you. Is
> your entire life like this?

Brent is trying to apply the function of a general free market to a
specific participant in a free market. Ford is free to operate as they
see fit, within the law, and can allot, ration or otherwise control
distribution of their products among the dealer network as they see fit.
They are in competition with GM, Toyota, Mercedes, DC etc. in the
overall free market across their product line and this includes the
GT500. He thinks, internally, Ford should also operate as a microcosm
of the larger free market and by the same rules. He doesn't understand
that no manufacturer operates this way because they have differing
marketing strategies for their products. It is this or he is just one
of those people that will never reverse themselves on a stated opinion
even when they know they're wrong.

In article >, Michael Johnson, PE wrote:
> ZombyWoof wrote:
>> <snip>
>> And you don't generate additional profit for yourself? Do you work
>> for minimum wage? So you have an objection, who knows what the basis
>> is because you don't even know what a "Free Market" truly is anyway.
>> No one has yet to weigh in on this discussion agreeing with you. Is
>> your entire life like this?

> Brent is trying to apply the function of a general free market to a
> specific participant in a free market. Ford is free to operate as they
> see fit, within the law, and can allot, ration or otherwise control
> distribution of their products among the dealer network as they see fit.

Of course they are... but ford dealer to ford dealer pricing, the subject of
this thread, not ford versus the world, is not following free market
principles as some claimed. I only pointed that out.

> They are in competition with GM, Toyota, Mercedes, DC etc. in the
> overall free market across their product line and this includes the
> GT500. He thinks, internally, Ford should also operate as a microcosm
> of the larger free market and by the same rules.

Never said they 'should' do anything in this thread. See this is the
disconnect. I write A you read B. I stated that dealer pricing is not
being driven by the ideal free market as claimed. Having been unable to
show me wrong in that, you and others have decided to insert all kinds of
tangents and strawmen like the above.

I feel ford is not maximizing their profit by doing allotments, but that
is the closest I got to should or should not. Maybe they want to 'reward'
dealers at their own expense. Who knows. You might want to stop building
strawmen by putting words in my mouth.

> He doesn't understand
> that no manufacturer operates this way because they have differing
> marketing strategies for their products.

I fully understand that many manufacturers have various plans, schemes,
etc. Your insulting claim that I don't is yet just another irrelevant
tangent.

> It is this or he is just one
> of those people that will never reverse themselves on a stated opinion
> even when they know they're wrong.

You just agreed with me that ideal free market principles are not in play
between independently owned ford dealerships when it comes to the GT500
because of allotments creating an artificial scarcity.

What it comes down to, is the above statement of yours is part of this
giant face saving excerise where you and others have introduced one
irrelevant after the next rather than just state openly that claim that
ford dealership pricing one compared to the other, was like the ideal
free market, wasn't correct.

In article >, ZombyWoof wrote:

> But you aren't anywhere near close to what the definition of what a
> "Free Market" is in either a demand or command economy so what is your
> point?

If you don't understand it by now, you're a hopeless moron.

In article >, ZombyWoof wrote:

>>Now imagine that Best Buy had a manufacturer's allotment of 3 X400 tvs,
>>and Circuit City had an allotment of 600. Best Buy sold out, who do you
>>buy from?

> Either I don't buy, or I wait for Best Buy to get some more. Fairly
> simple decision. What is your point?

The same one you're too dense to grasp. The lack of free market
competition between retailers of GT500s.

>>Beinging to grasp how allotments are about creating an artifical
>>scaricity? Not an ideal free market situation by any means.

> Nope, it happens all of the time depending on sales volume. Chevy has
> been doing it for years with the Corvette. Harley with their entire
> model line. The bigger the retailer the more units they get from the
> end manufacturer. This current model is not unheard of in the
> marketing of limited model vehicles and has been done by most major
> manufacturers for limited run vehicles.

happens all the time != ideal free market.

>>Corporations in general do not like free markets. They like markets
>>slanted in their favor. Just because they successfully manipulate a
>>market doesn't mean it remains 'free'.

> Of course they do. We are a demand economy as well as a capitalistic
> one. Make as much as you can as fast as you can. If you are taking
> advantage of the consumer another supplier will step in with either a
> better or cheaper product. or in the case of truly low supply, and
> alternative product. This will happen when GM & Chrysler bring their
> Pony Cars back into the Marketplace.


True, what's your point?

In article >, ZombyWoof wrote:
> I understand all of that, and even get that he is even using the wrong
> term to apply his thesis on the subject.

What term would you like? Clearly as I read the initial posts it was
about pricing from one ford dealership to another.

> In a Demand & Capitalistic
> economy Ford is 100% free to do whatever they want in the marketing of
> their vehicles.

No one has stated otherwise.

> It is all a game and has absolutely nothing to do with the
> restrictions on free trade.

Who said anything about restrictions? Not me. Another irrelevant tangent.

> I think he's just ****ed he can't afford one.

I think you have to be insulting in a face saving effort. But if you must
know, I could pay the inflated price in cash.

In article >, ZombyWoof wrote:
> On Mon, 30 Oct 2006 12:19:55 -0600,
> (Brent P) wrote something wonderfully witty:
>
>>In article >, ZombyWoof wrote:
>>> Seeing as how he hasn't gotten one person to agree with him it is easy
>>> to see how.
>>
>>Does a fixed allotment create scaricty? Yes or no.

> No, unless you are talking about a fixed allotment of cars in general
> created by the government. i.e. only one new car per family every ten
> years, you used your new car allotment eight years ago and now you
> want to buy a new GT500 and can't for all the money in the world.

You seem incredibly fixated on government needing to be involved... what
happens with the creation of a monopoly? The free market allows for
monopolies to be created. It allows for said monopolies to use that power
to crush any and all new comers. government doesn't need to be involved
at all for a market that is less than free for an item to exist. In some
cases only a clever or not so clever marketing scheme.

> I hereby allot you 1 troll doll per month. I'm sitting on a million
> of the *******s, but I'm only going to allot you one a month. Exactly
> what are they worth if nobody is buying? Scarcity has absolutely
> nothing to do with demand. Without demand there is no scarcity
> regardless of the supply.
>
> Nobody in the world can force me to give you more Troll Dolls because
> I am the sole source of them. You can get something that looks like a
> Troll Doll, even performance like a Troll Doll, but not a genuine
> ZombyWoof Troll Doll.

You're going through some interesting backflips. Everyone knows if there
was no demand there would be no scarcity. But as long as there is some
demand, allotments can be used to create scarcity. Slowly, you're
grasping it.

I made a comment within the narrow subject scope of the thread. Stay within
that scope.

The price increase in Ford GT500's is not a function of supply and
demand or a free market. It's the result of two economic factors working
together; the price elasticity of demand (specifically an inelastic
demand curve) and the realization that the GT500 can be classified as a
Veblen-good.

Supply and demand is only applicable to common shared goods which are in
wide demand. The GT500 is a luxury good (IE a Veblen-good) and does not
fall within this definition. For example, supply and demand has nothing
to do with the pricing structure for a $2.5 million dollar yacht.

While it's true that Ford controls both the amount of production (the
total number of vehicles produced in any given period) as well as the
number of vehicles alloted to any specific dealership, this does not in
an of itself create an artificial scarcity of the item. All products are
produced in limited supply and it is the manufacturer's job to match
production rates with consumption (consumption and demand are different).

The price isn't being increased because of greed (greed is both a given
and a requirement in a transaction when you're talking about a luxury
item), or availability. It's up because the dealerships realize that
they can increase the price without reducing the demand for the item (IE
it's inelastic - no matter how high or low the price goes the same
number of people will want it).

In the beginning stages demand for a Veblen-good is fixed and only
increases due to the bandwagon effect. As more people buy the product
demand will increase in direct proportion to the perceived exclusivity
of the product in question (although these two ideas seem counter to
each other). So, over the next six to twelve months you'll slowly see
more GT500's hitting dealer showrooms, and yet the price probably wont
come down significantly.

If a Ford dealership increased the price of say a red V6 Mustang 100% no
one would buy it. Why? Because although it's a high demand item, it's
not preceived as a must-have item (something you can't live without) or
an exclusive item. Buyers would simply switch to another car.

People will pay the higher price for the GT500 because it's perceived to
be an exclusive item that's worth the price.

mark h

PS - Despite what some think the US operates as a free market. You can
argue that Federal and State sales tax impinges on a free market, but
that argument has been run over too many times to count. The government
itself does not control, or restrict the production, sale or procing of
the GT500. However, there are several staple type products (such as milk
and sugar) which are artifically price controlled. These items could be
considered to exist outside of the free market.

In article >, Mark Henry wrote:

> While it's true that Ford controls both the amount of production (the
> total number of vehicles produced in any given period) as well as the
> number of vehicles alloted to any specific dealership, this does not in
> an of itself create an artificial scarcity of the item. All products are
> produced in limited supply and it is the manufacturer's job to match
> production rates with consumption (consumption and demand are different).

Please explain how alloting too little to one area and too much to another
doesn't create scaricity in the area with too little. Spreading a product
thinly can create a scaricity.

> The price isn't being increased because of greed (greed is both a given
> and a requirement in a transaction when you're talking about a luxury
> item), or availability. It's up because the dealerships realize that
> they can increase the price without reducing the demand for the item (IE
> it's inelastic - no matter how high or low the price goes the same
> number of people will want it).

Demand does vary for the GT500 as witnessed by numerous people in this
newsgroup alone who may buy at ~$40K but certainly not at $65K. But for
that to happen there has to still be equal or more people left than there
are cars by the time the price hits $65-70K. This can helped greatly by
using allotments. This way the cars all won't go to one region where
there are a ton of people willing to pay $59K but not $65K. The fact
there the product is in say, NYC, doesn't change the market situation in
LA unless either product or buyer knows it exists on the other side of
the nation and buyer and seller can meet up.

> If a Ford dealership increased the price of say a red V6 Mustang 100% no
> one would buy it. Why? Because although it's a high demand item, it's
> not preceived as a must-have item (something you can't live without) or
> an exclusive item. Buyers would simply switch to another car.

As pointed out by many in the case of the GT500 including myself.

> People will pay the higher price for the GT500 because it's perceived to
> be an exclusive item that's worth the price.

Some people are idiots, some idiots have money they wish to waste on some
perception of image.

In article >, Brent P wrote:
> But for
> that to happen there has to still be equal or more people left than there
> are cars by the time the price hits $65-70K.

Clairification... for the demand to appear to be unchanged.