Monday, October 18, 2010

Even Alcohol is Affected by Demand and Supply

For those who love to indulge in wine, New Zealand is the place to be, why it is now cheaper than water. This is a consequence of increases in vineyards for export, now with every country having it's own quality wine industry, France, Australia, Chile, South Africa, Canada, California, well there was doomed to be a glut at some stage, over supply hence the collapse in prices.

This goes to show that the laws of demand and supply are always at work, the market is always self correcting, if there is too much of something the price for that good or service is doomed to collapse, too much money and well people will look for strange ways to get those returns, remember the collapse of Lehman brothers. there is no difference if you are a true economist, wine, money, cars, corn, computers, great supply will lead to price falls, good for the consumer, there is so much alcohol one can drink, with those extra savings maybe they can do something else, like have a better quality of life.

This refutes the supply side economists that once something is supplied there will be greater demand, show at first, but there is always a limit to how much one can consume. Read the story, a great vindication of the markets, click here...

Bhekuzulu Khumalo

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Bhekuzulu Khumalo

I write about knowledge economics, information, liberty, and freedom