Tom Purcell, a freelance writer is also a humor columnist for the Pittsburgh Tribune-Review, and is nationally syndicated exclusively by Cagle Cartoons newspaper syndicate. His latest column is here.
Although this column was meant to be a satire on the failings of capitalism, especially crony capitalism. I began to wonder about used furniture--the metaphor in the article.
Personal items always have emotion attached to the price so the item is worth more to the seller than to the buyer, but why does used furniture sell so cheaply?
My down and dirty answer is that used furniture is highly price elastic. The characteristics describing elasticity include the time to shop around and the number of the subs. That's the microeconomic answer. The macro answer is that furniture is a durable good and during a recession, consumers cut back on spending for durable goods. If consumer incomes fall, there will be a change in aggregate demand and prices fall.
I think my point is there are many reasons why an item is priced. Markets can be monopolized, tastes and preferences could change, and the item could even be elastic. That's why the government should not be in the markets--they simply do not have the data to know how to fairly price every item. That's capitalism.