Letter Re: Report on the Dulles Gun Show

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James,
The recent letter from a reader about about the gun show had some comments about pricing so I thought it would be helpful to remind readers some basic economic principles.  Prices are a natural function of supply and demand and higher prices, especially during periods of high demand, perform the needed function of allocating scarce resources to the optimum number of customers.
For example, a dealer at a gun show receives a limited number of cases of ammo.  If he were to sell it at historical prices people would buy 2-3 cases each.  Now we have higher prices due to limited supply forcing consumers to limit themselves to what they can afford/feel comfortable buying at that price.  This allows more buyers to access these scarce resources.  Eventually, the demand curve will shift back to the left and automatically shift pricing down.  As long as we are all chasing ammo the supplies will be limited and the price will continue to climb.

Important note:  It is a red herring from the progressives to squeal "Price Gouging!!!" when prices naturally move higher do to demand.  $1,000 for a case of .45 Automatic would be gouging but ask yourself this question when the "gouging" thought comes to mind:  Do I yell for fairness when prices quickly drop and I get a good deal on a product?  How come you don't take the moral high ground and demand to pay more when prices fall due to oversupply or price deflation?

A resource I recommend is the book Basic Economics: A Common Sense Guide to the Economy by Dr. Thomas Sowell.  This puts economics into plain language with no math, graphs or equations.  I highly recommend it. - B.H. in North Idaho

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This page contains a single entry by Jim Rawles published on February 13, 2013 12:05 AM.

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