He does know what he's talking about though.

http://en.wikipedia.org/wiki/Peter_S...estment_advice

It is a work of brilliance . The original quote came from an Oliver Stone movie. "I create everything I own." is not really accurate too as it also depends on the workers and land. But since Stone, Michael Moore, Paul Krugman, and Robert Reich are government loving bastards, I thought I would keep it that way just to piss them off or teach them.

But the saying has more meaning, if you don't own anything then all you are is a cog in a wheel of a machine. To gain wealth you have to own capital (businesses and money for businesses). Unfortunately, there are very strong forces in government that want to take the little capitalism has left. If government get 20 dollars for every dollar from a business that a business owner gets, can you say we live in a capitalist society?

fly flying itt

I was more than shocked when I stumbled in this thread and saw a certain poster attack someone's character viciously without any evidence.

“If you can't explain it simply, you don't understand it well enough”

Is that why people fall for the BS that they do?

By the way, I think there's a difference between *explaining* something to someone, and *teaching* that same thing to someone.

Or I could just take your Einstein quote and raise you a Feynman quote:

"If I could explain it to the average person, I wouldn't have been worth the Nobel Prize."

...

Do you really think that Peter Schiff and other time cube economics types were the only ones that predicted the crisis?

Here's a quick tutorial on supply and demand I googled:
http://www.investopedia.com/universi...#axzz1gIm5Gg00

When you lower prices and people buy more, it's not technically an increase in demand, because the demand was always there. X people were willing to buy the product at 5$, 3*X people are willing to buy it at 3$.


The point is that you are essentially correct in your thinking, but you're not using the economics definition of demand.

Yeah--demand refers to the set of points on a price-quantity graph. In other words, given any price, the demand (or demand curve or demand schedule) will give you the quantity demanded. As you lower the price, you get a different point on the demand curve. At that lower price, you'll have (usually) a higher *quantity demanded*.

Yeah, but they always attack Krugman's character without any evidence.

FYP

You're assuming real world firms actually try to maximize demand and have MR=MC. Never happens. As a business you make more profit on less product .

wat?

Companies never try to find the point at which they sell the most products they can and still make an economic profit. No real world company will ever cut its margins that dangerously low.

que?

Gingrich obviously agrees with Krugman.

http://www.cnn.com/video/?hpt=hp_t2#...ets-romney.cnn

What makes higher profits for companies? A market with a leader or two and some small firms using monopoly pricing or a competitive one with firms lowering prices vying for demand and market share?

You said "As a business you make more profit on less product ." Therefore, you maximize profit with zero output. If you make some profit with 2, then by your statement you make more profit with 1. And you make more profit with 0, because you make more profit on less product.

Maximizing [quantity] demanded means setting price = 0. I don't think anyone is saying that.

Also, MR=MC is where profit is maximized by definition. If you increase your revenues by more than your costs increase if you make one more unit, your profit increases. So you should do that, until you get to the point where MR=MC. Similarly if MC > MR, you should reduce output.

That's what was wrong with the thing I replied wat to.

What e i pi replied que to was similarly confused.

And then somehow you post something about the number of firms, which shows even more confused thought.

No, you're twisting things around. I am saying two things.

Real world firms never think in terms of MC=MR.

The other is that by supplying less demand than a market can sustain, they can charge higher prices. If the breakeven point for butter was 100 tubs in the industry, and the firms in the market could instead to sell slightly less and have higher margins, they make more money supplying 90 tubs. Why? Because you have to compete for the last 10 tubs sold. Demand can change in the meantime. If no one in the market makes a price move(collusion), every firm reaps the markup, and demand goes unfulfilled. Why would a firm gamble on the last few sales when it can make safe profits following the rest of the market?

If they dont' want to think correctly, sure, they might not think that way. I'm not going to say there aren't stupid people out there.

WTF does this mean? Firms don't supply demand, they supply goods--they choose a quantity to supply. And what's that about 'sustain'? I can sort of get what you're saying with the first part (even though you're using economic words horribly wrong), but the second part makes no sense.

Well, because you're getting closer to the point where MR = MC.

But I also think you're glossing over some assumptions in your example as well.

Because the firm doesn't want to maximize profit?