Tuesday, March 1, 2016

How Sweet It Is! The Maple Syrup Cartel Crumbles

How Sweet It Is! The Maple Syrup Cartel Crumbles: Economists have long argued that irresistible market forces will crush a cartel that inefficiently restricts supply and raises the price of a product.

This article is proof, that over time, cartels can be eroded. The economic notion of elasticity of demand will always rule. Customers will, if given alternatives, exercise those alternatives, relative to how the value those things they have during their utility seeking process. In English: People, during their pursuit of happiness, will acquire the things that provide them the best value.

When value equals and exceeds price, an exchange takes place. If the value begins to drop below the price, people will seek out alternatives. Recall that value is subjective to each person.



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