Elasticity: The Economic Concept Behind How Companies Price Products | WSJ Price Index

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  • Опубліковано 22 лис 2024

КОМЕНТАРІ • 92

  • @davidllewis4075
    @davidllewis4075 2 роки тому +88

    Was told by a sales manager in 1966, "Retailing is the art of finding out what the customer will pay." It's always worked for me.

    • @prathamsharma3867
      @prathamsharma3867 2 роки тому

      Sir,how old are you?

    • @davidllewis4075
      @davidllewis4075 2 роки тому +4

      @@prathamsharma3867 I was born 10-14-1943

    • @123chargeit
      @123chargeit 2 роки тому +2

      I had this argument with a guy yesterday, he blamed price inflation on greedy corporations charging more. I'm like yeah and what else is new. Everyone charges as much as they can and still sell there product/service, that didn't start 3 years ago.

    • @whatisahandle221
      @whatisahandle221 2 роки тому +4

      @@123chargeit -I strongly suspect the youngest consumers, pent up during the pandemic, maybe just now earning enough beyond school debt or paycheck to paycheck , have been oblivious to price raises because they don’t have much experience with purchasing either normal goods or larger ticket items. Ie they are willing to pay more because they don’t know better. The result? The “normal” greed of companies, the excuses of the (real) cost rises due to supply & demand differences from the pandemic, and the susceptibility of the new consumers has driven some of the ridiculous inflation higher than otherwise might have happened-if, say, it was 5-15 years ago.

    • @davidllewis4075
      @davidllewis4075 2 роки тому

      @@whatisahandle221 May I respectfully submit another life lesson which in this old man observation has always proved true: "There grew up a new generation which knew not" (Jug 2.10).

  • @thomashartmann5625
    @thomashartmann5625 2 роки тому +21

    I first learned about this concept from Stringer Bell in The Wire. Just another reason why it‘s the best show ever

    • @Hobbes4ever
      @Hobbes4ever 2 роки тому

      read Microeconomics by Paul Krugman and Robin Wells 👍

    • @Sequaloid
      @Sequaloid 2 роки тому

      i thought the wire was trash

    • @ling636
      @ling636 2 роки тому

      The Wire fans and being annoying
      NAMID

    • @giovannip8600
      @giovannip8600 2 роки тому

      Or you know most people in high school?

  • @InTheMiddle95
    @InTheMiddle95 2 роки тому +17

    The problem is price stickiness. When something goes up it rarely goes down, even if the factors that made it go up in the first place are no longer there.

  • @phillipfries8844
    @phillipfries8844 2 роки тому +54

    Market elasticity theory goes out the window in a predominantly monopolistic economy. When a small number of companies control a high majority of their market segment (oil, airlines, grocery stores, car dealerships, meat packing plants, etc) they can 'informally' collude to price their products to bring industry wide profits up - and they do. Many US industries are raising prices far beyond their increased costs due to inflated costs of input, and are now registering their highest profits in years; to the tune of 100-300% profit increases. The US will never get inflation under control simply by raising interest rates.

    • @nelsonAism
      @nelsonAism 2 роки тому +1

      You are 100% correct sir. This is why so many people feel as if everything is more expensive and the cost of living is increasing. It has nothing to do with whether consumers are willing to pay X,Y,Z for a product. It's Bs. It's about what other choice do we have? We have to send our kids to daycare. We need a place to live. We have to fill up the car with gas. We need to buy food. I've got to fly across the country.

    • @again5162
      @again5162 2 роки тому

      In Australia we have a duopoly in the supermarket sector just Woolies and Coles , Aldi are trying to break into the market for 25 years now but most of us don't know Aldi from a car brand

    • @jillclarke7264
      @jillclarke7264 2 роки тому

      Thanks well said and the truth. The US will only harm the middle and lower class worker by raising rates. Big business will not lose a dime.

  • @dreameisters
    @dreameisters 2 роки тому +7

    First time I heard about cold water detergent. Here in Indonesia all detergents can be use with cold water.

    • @errinwright
      @errinwright 2 роки тому

      Actually osmanthus wine is a good detergent in these times

    • @tingvictoriano6517
      @tingvictoriano6517 Місяць тому

      they are just reinventing "so called" benefits that has always been there.

  • @again5162
    @again5162 2 роки тому +6

    In 2008 I was stacking shelves and noticed that every Monday the price tickets would have to be changed and a cup of ice-cream would go up 5 cents a week.

  • @JJs_playground
    @JJs_playground 2 роки тому +9

    Grocers are reporting record profits. This isn't inflation this is corporate greed.

    • @spacetoast7783
      @spacetoast7783 2 роки тому +2

      I wonder if they're doing that via inflating prices. 🤔🤔🤔🤔🤔

    • @JJs_playground
      @JJs_playground 2 роки тому

      @@spacetoast7783 they're inflating prices because they know they can. Because the idea of inflation has seeped into the collective consciousness that everything has a higher price. If they weren't being greed they wouldn't be reporting record profits.

    • @spacetoast7783
      @spacetoast7783 2 роки тому +1

      @@JJs_playground So what you're saying is that prices are going up across the board. I wonder if economists have a word for that phenomenon. 🤔

  • @alexdubois6585
    @alexdubois6585 2 роки тому +16

    Dangerous gamble for branded products. Customers who start to switch to unbranded may not return to branded until the quality of unbranded is not acceptable. Complex products may boundce back easily, basics may never recover the customer.

  • @DeeDubious
    @DeeDubious 2 роки тому +36

    The amount of elasticity these companies take from my wallet has stretched me as thin as paper

  • @RomanDubP
    @RomanDubP 2 роки тому +14

    Andrew Watterson: "Elastitties" (C) 2022

  • @abanks202
    @abanks202 2 роки тому +14

    They slightly mentioned willingness to pay. We know certain foods and TP we will purchase no matter what because we cant live without it. The laundry detergent, smart ones will purchase the cheaper brands because they are just as good as the others. Arm and Hammer is one of them. You get more volume for the same price as Tide.

    • @tigerrx7
      @tigerrx7 2 роки тому +1

      Plus Tide fade the color of your clothes

    • @hoangle2483
      @hoangle2483 2 роки тому +2

      what if these mega brands start buying out these smaller brands ? Owning multiple brands which can fit into multiple market segments.

    • @abanks202
      @abanks202 2 роки тому

      @@hoangle2483 anti trust laws and there are judges that can block these actions. Also these smaller brands likely wouldn't allow the sale knowing they could increase their market share and make more that way.

  • @paco1O3
    @paco1O3 2 роки тому +8

    Perfume and . . . .staples? Who is buying staples as a luxury non-necessity? Who is not buying them because of the price?

    • @Mainlychesscontent
      @Mainlychesscontent 2 роки тому

      I’ve gone paperless

    • @hoangle2483
      @hoangle2483 2 роки тому

      since most of us have gone digital now. I suspect these are corporations and government institutions which are still somewhat required to have paper documents (due to law and regulation) and thus having to buy staples. And they buy in bulk.

  • @___beyondhorizon4664
    @___beyondhorizon4664 Рік тому

    Companies shrunk product's to keep the same price but I noticed! What this report did not mentioned is that Planet Fitness required members to provide their checking account number to bill directly. The us no way I will let any company to have my checking account!

  • @OfficialChrisFair
    @OfficialChrisFair 2 роки тому

    The $1 Lunchable in this video actually referred to a candy item that contains like 5 gummy worms.... lol

  • @yongchen4158
    @yongchen4158 2 роки тому

    Inflation investigated reported basis need meaning need to survive measures with money management

  • @MayorMcC666
    @MayorMcC666 2 роки тому

    I hate euphamisms for decreases in quality of life

  • @jessicaschroder6978
    @jessicaschroder6978 2 роки тому

    U can’t get generic tide from tha amazon shelves

  • @phucyouse5316
    @phucyouse5316 2 роки тому

    SEAN

  • @yongchen4158
    @yongchen4158 2 роки тому

    Basic need food and gas money

  • @ConnorCanRead
    @ConnorCanRead 2 роки тому +5

    It's not inflation, it's price gouging in key sectors.

  • @auro1986
    @auro1986 2 роки тому +5

    inventing products that customers never asked for increases prices of everything

    • @dandansfu
      @dandansfu 2 роки тому +1

      wow what a great tip
      this is better than the tip ppl give about buying stocks
      buy at low and sell at high

    • @spacetoast7783
      @spacetoast7783 2 роки тому +1

      No it doesn't. There aren't any price indices that automatically add prices of new products.

    • @abumansaray7
      @abumansaray7 2 роки тому

      How? I don't follow the logic. Inventing new products, especially if that product already has a market, should, in theory, lower costs bc of competition. Either that or the quality of the competing products would have to improve to justify the cost.

    • @spacetoast7783
      @spacetoast7783 2 роки тому

      @@abumansaray7 That's the opposite of what OP said

  • @karthik_mv
    @karthik_mv 2 роки тому +3

    People!
    Use a Bidet😂

    • @monember2722
      @monember2722 2 роки тому

      Don't you still need paper after a bidet?

    • @fakeemail4005
      @fakeemail4005 2 роки тому +1

      @@monember2722 You save on paper tho

    • @monember2722
      @monember2722 2 роки тому +1

      @@fakeemail4005 most people can save on paper by not wrapping it a million times around a hand. However, you spend more on price of bidet, addtl water usage, price of bidet and install. Bidets are fine and all, but it ain't exactly a money saver.

    • @karthik_mv
      @karthik_mv 2 роки тому +1

      @@monember2722 No
      No one in India uses toilet paper….
      Bidets are always installed in every washroom everywhere

    • @monember2722
      @monember2722 2 роки тому

      @@karthik_mv ok.

  • @bateriesrl6591
    @bateriesrl6591 2 роки тому

    wait a sec. u tell me tide is a premium in your country ???
    here is just normal bottom guy use tide ...

  • @patl4668
    @patl4668 Рік тому

    This was a long walk on a short pier story.

  • @sindyr
    @sindyr 2 роки тому

    Shrinkflation.

  • @Hobbes4ever
    @Hobbes4ever 2 роки тому

    shrink-flation

  • @kennethjose7159
    @kennethjose7159 2 роки тому +4

    They are doing the usual shrinkflation. Or substitute cancerous chemicals for cheaper production

  • @3hristopher
    @3hristopher 2 роки тому +3

    Eventually people will also lose there jobs from what I heard around early 2023 or middle that’s when jobs are going to be force to let people go

  • @mjg239
    @mjg239 10 місяців тому

    This video is sad because it shows how much the American middle class has shrunk over the years. Back in 2015 the Pew Research Center said that the U.S. middle class is no longer the majority of the country anymore, which means that many of us are living paycheck-to-paycheck or just getting by with working class salaries. We can't spend as freely and buy things plentifully as the baby boomer generation used to do. Essentially the baby boomer generation was the peak of the U.S. middle class and now it's all going hill with Gen X, Millennials, Gen Y, Alphas, etc. Now they're making stories about heterosexual couples who are young and choosing not to have kids (DINKS) nor own homes, preferring "used" cars, second hand clothes, shop Dollar stores. All while prices keep going up and the top 1-10% of Americans get wealthier and more exclusionary than ever. It's sad.

  • @daniarmstrong3023
    @daniarmstrong3023 2 роки тому

    More corporate BS

  • @JogBird
    @JogBird 2 роки тому +4

    vote w your wallets

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    @derrickman925 2 роки тому +35

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      @user-samuel_ 2 роки тому +1

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      @robhochsteindickey1269 2 роки тому +1

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  • @bolonabolona
    @bolonabolona 2 роки тому

    Greed is the cause of inflation.

  • @Virtual-Media
    @Virtual-Media 2 роки тому +1

    Summary, consumers remain ignorant..

  • @maestrovso
    @maestrovso 2 роки тому

    Economics 101 - which we called it bird course being applied science students as this together with the like of psychology 101 are courses we took to fill the required "electives" in addition to our heavy course loads. It is not like Economics is a real science. Try understand elasticities of material under all sorts of environmental and load conditions, which is a real science as in material science.

    • @spacetoast7783
      @spacetoast7783 2 роки тому

      Let me guess: Psychology and biology are also fake science because they rely on statistics.