Paul -- you should consider the lines of an "A". ;)

http://forums.pelicanparts.com/uploa...1236310972.jpg

http://forums.pelicanparts.com/uploa...1236311046.jpg

The economist in me would point out that...
- You could have set the price or minimum to $650, in which case you would have $0 and a steering wheel that you don't need. Essentially no-deal. Would either of you be better off in that scenario?

I'm curious where you got the idea that the wheel was worth $650, or rather why you think that the market will always pay more then that amount? Prices go up and down. You could argue that you had over $500 invested in the wheel. But to the buyer that is irrelevant. Buyers are never concerned with the sellers' costs -- only with the price and how it compares with their alternatives. If they can get a wheel which performs a comparable function for the buyer for $350, you'll never get $650 for your wheel no matter how much you invest in it.

Auctions (which I assume you used) are the most efficient means to find the point where supply meets demand, and ensure that the seller gets the highest price for which there is an available buyer, and the buyer gets the lowest price for which there is an available seller. If there are more buyers then sellers, the price will go up until buyers decide that they have better things to do with their money, at which point there will no longer be a market. If there are more sellers then buyers, the market will go down until sellers decide that they have better things to do with their products then sell them at the available market price. Once again if there are no sellers willing to offer an item for sale, there will no longer be a market. The market will have decided that the sellers can just keep their products.

You'd think that in the current economy, especially the real estate market, that people would start to have this realization. Unfortunately with all of the government bail-outs, the reality is that the market is distorted and buyers and sellers get the wrong messages.

If the government were to have come in and "bailed you out" since you couldn't get your price of $650, the result would have been that all of us would have been taxed in order to write you a check for $246. The end result would be that you would take away that your wheels would still be worth $650 even though there wasn't anyone in the market place willing to pay that price for it. So you'd continue to make more of them which would result in an ongoing series of $246 payments from the government to you. The maker of the alternative wheels which really could be profitably sold for $404 would go out of business because their margins would always stay low in spite of competing with a $650 competitor. Eventually they might wind up on government bail-out too, which means that tax payers would be sending them money in addition to the $246 checks going to you, all to support this imaginary $650 steering wheel price. Ultimately the buyers stop having disposable income because of all of the taxes that they are paying (which are being used to support you and your cheaper competitor), so they stop buying steering wheels.

Suddenly you and your competitors can't find anyone to buy your steering wheels and are faced with bankruptcy. But since at this point you've got good connections in the government, and the government is deep into supporting your business because of the repeated support payments, they step in to help you avoid bankruptcy. Needless to say, this is going to cost the taxpayers even more money, so now the markets for furry dice and turbo wheels dry up because everybody lost their jobs making wooden steering wheels, and no longer have money to spend on their Porsches.

:confused:

Oh. I'm sorry. Please forgive the diatribe. I've had my mind on other stuff lately.

(PS: Macro- and Micro-Economics should be required classes for high-school seniors. Financial Investments should be required classes for all aspiring politicians too. Anyone jumping into the market based on our President's enthusiasm for the stock market's "Profits and Earnings Ratios"??? :rolleyes: )

What pretty cars! I wish I would have bought one in the mid 80's when I was in high school before they got so pricey.

Porsche356A,

I'd have no problem with that!;)

Paul

Fear not, they were "expensive" in the 80's, and even in the 70's. Certainly more then most high-schoolers could afford. It's not like everyone woke up after 2000 and suddenly recognized that 356's are cool cars. I knew someone when I was in high-school (~1980) who had a 356 Speedster, and if I remember that was a $40K car even then. Plain-jane 356 SC's were in the teens to $20K's. I've got some old R&T's and will check the classifieds if I have a few minutes.