| ▲ | cyberax 6 hours ago | |||||||||||||||||||||||||
> When there’s more of a thing, it costs less. Yeah, and when we add lanes to roads, the average speeds increase and commutes get shorter. Right? Also, if the government gives me $1 billion, then I'll be rich. But what happens if the government gives everyone $1 billion? Everyone will be rich, right? | ||||||||||||||||||||||||||
| ▲ | svpk 6 hours ago | parent [-] | |||||||||||||||||||||||||
... Your examples seem to undercut your point if I'm understanding what you're trying to say. In your first example the "cost" in the form of traffic etc. was reduced so more people "buy" in the sense that they go on the road until you reach a new "cost" equilibrium. In practice that equilibrium is quite close to the original cost so it doesn't fix the issue traffic. But if that same number of people had driven before the high way expansion traffic would have been way worse; the cost would have been too high so they previously opted not to drive. In your second example by increasing the supply of money the money ends up costing less; it becomes worthless due to inflation. When there's more of a thing it cost less. To be fair, building more housing can be like highway example. If there's tons of pent up demand of people looking to move somewhere increasing supply dramatically can fail to move the needle on cost because there's many marginal buyers who all have basically the same price. If you've got a million people who want to move somewhere and are all willing to pay up to 500k for a house the price of a house won't fall under 500k until you've built at least a million more homes. | ||||||||||||||||||||||||||
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