Re:Please remove mitsuhiko/*
by tim333 on Sunday November 02, 2014 @08:04AM
(#8546486)
Ah - that was a simplification. If it costs $1000 to mine and sells for $2000 then short term the miners will make a profit but long term people will build more mines. This is a slow process - 10 or 20 years but eventually supply exceeds demand, the price drops to $700 or some such, the miners go bust and the cycle repeats. But generally the price stays within a factor of two or so of the production cost.
[ Parent
| on HN ]
so you talk about supply and demand, yet think cost is set purely by suppliers? What do you think would happen to the cost of potatoes if only 10% of last years harvest was harvested this year. It would go up, but only to the point where the supply vs. demand equalized, i.e. 90% of people wouldn't be buying potatoes cause they cost way too much, but there would be 10% of the people(like my wife) who would still be willing to buy them at $50 for 5 pounds, cause she values potatoes that much(she's got a serious fixation on potato soup). I.e. the value of a good depends on the person doing the valuing, i.e. subjective value.