Supply And Demand 101

09 Jul, 2012 by John Hawkins

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Why does Lobster cost more than hamburger? Don’t ask anybody in an Occupy crowd or for that matter, judging by their legislation, most Democrats in Congress. Just look at the way they’re making our food costs skyrocket by driving corn into ethanol and their laughable belief that putting government in charge of health care will reduce the cost.

Tea Partiers, on the other hand, tend to have a better grasp of economics which is why they’re out in the streets trying to save our country before we go bankrupt. We get that it is all about supply and demand.

If you have a product that’s hard to come by and there’s a high demand, it’ll be expensive. On the other hand, if there’s a large supply and low demand, it’ll be cheap. If there’s an enormous supply and an enormous demand, then the potential is there for mass production which can dramatically reduce costs. This is how the market is able to determine where goods should go much better than any bureaucrat. It’s also why computers and flat screen TVs have gotten so much cheaper as the demand has gotten large enough to produce those products in massive quantities.

Additionally, for the moment at least, it’s why: lobster is cheaper than hamburger: in much of America right now.

An excess supply in Maine of smaller soft-shell lobsters has driven prices to under $4 a pound, the Associated Press reported this week, making the luscious sea creature cheaper than the per pound price of deli meat in some cases.

Lobster was once synonymous with living large, but thanks to an abundance of the soft-shell version of the crustaceans in recent months, it’s not just a meal for special occasions anymore.

An excess supply in Maine of smaller soft-shell lobsters has driven prices to under $4 a pound, the Associated Press reported this week, making the luscious sea creature cheaper than the per pound price of deli meat in some cases.

Now that’s upgrading your usual boring baloney sandwich for lunch.

It doesn’t matter whether it’s lobster or oil, health care or electric cars; the market is always the most efficient way for an economy to distribute its resources. Anyone who thinks a bunch of cubicle jockeys can manage this whole process from DC doesn’t know the first thing about the real world.