Quote:
Originally Posted by ThePrince
Does nobody here actually understand microeconomics? Just because people don't understand something, doesn't mean it's a "fairy tale".
When it comes to supply and demand, there's elastic demand and inelastic demand. Milk is inelastic demand, which (put simply) means that people who drink milk are going to drink milk regardless of the price (within reason), so iggy_oi is correct that the farmers dumping milk shouldn't have much of an effect on prices, but it's not because supply and demand is a fairy tale of evil capitalism.
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While demand is inelastic supply depreciates quickly. This mean if there is surplus in the market it will be sold at a discount.