Chicken or the egg?

CrackerJax said:

Precisely because it is illegal, you cannot argue supply and demand. Normal business models don't work on black market items.

Yes...what the person is willing to pay.... in the extreme.... greed. Ppl would be willing to pay FAR LESS. So why not? We all know weed isn't that expensive to grow.... the customers don't set the price.... and your response fits perfectly.... what they are willing to pay.... the top. Always the top end. That's greed.

There is no shining armor for ppl who make their primary income off of weed.

They are PART of the problem.

Click to expand...

I am more than happy to help educate you. Legality does not make basic market conditions invalid. There is still a market; which means that as long as there is profit - there will be a supplier. Make sure you click on the second page:
http://economics.about.com/od/demand/ss/black_market.htm

You are right about one thing. The buyer does not set the price. Supply vs. demand does that. The supplier can name any price he wants; but he is not going to get it if the market does not demand it.

You think $30/oz is a fair price? Lets think it out - Initial cost of lights, dirt, ferts. Cannabis may not be expensive to grow but there is a LOT of time involved, months of care, trimming, time drying and curing, gas to get to your dealers house, time weighing and bagging, and all along this process there is a risk of losing your freedom if caught. Federal minimum wage is $7.25 an hour. Do you think it takes 4 hours of time to do all of the above? Do you think anyone in their right mind would take all that risk for minimum wage? That doesn't even figure in the fact that growers sell to someone who sells to someone who sells to you. You want 3 people splitting $30? Besides it would not be RATIONAL to sell it to you for $30 if someone else is WILLING to pay $300.

Let me put it this way. 2 dealers in your town - You know both of them (most people dont have multiple dealers). 2 dealers selling the same shit from the same supplier. Dealer A is selling for 300/oz and Dealer B is selling for 200/oz. Who do you buy from? Dealer B.

Dealer B is so popular because of his "discount" that he runs out of his supply quickly and it takes 2 weeks to get more. During that two weeks he makes no money - If he sold for $300 he would have made 50% more $$$ with no lull in his business (who wants a dealer that is dry 50% of the time). He has 2 options - keep his price low and sell 50% more (and increase his risk of getting caught 50% - I would argue exponentially) or he can buy the same weight and charge $300. It makes no sense to take the additional risk. Now if he had $30 oz he would be the sole supplier for the whole city... Word would spread fast - You know how fast he would get caught? And at $30 a bag the profit isn't there to justify incarceration.

Now dealer B is out Dealer A has open season on anyone that wants to smoke. The town is now dry and he has lbs laying around asking $350. Meanwhile some of dealer B's customers have extra smoke that they want for themselves but are willing to part with for $40 grams to their dry friends. The price just went up. Why? The supply was reduced. The fact that Dealer a ran out shows that his price was too low.

Now lets say 5 more dealers move into town and they have a steady pipeline of quality buds. What do you think happens to the price as the supply has drastically increased and they "compete" to pay their rent.

You don't like it? Grow your own. Your altruism wont effect the market.