22 LR Solution - RAISE PRICES THROUGH THE ROOF

[WinThePennant]

This 22 LR supply issue is a perfect example of how businesses, in an effort to avoid being called 'price gougers' (eg, Cheaper Than Dirt), are contributing to the problem. And, the public isn't helping by being so quick to jump on retailers who raise prices to reflect consumer demand.

If we weren't such babies about things, we wouldn't hold it against the business for raising prices. This supply/demand imbalance would be wiped out almost overnight if businesses would raise the price of 22 LR by 4 times the normal going rate.

Raise prices by a multiple of 4 times (to reflect demand), and you'll see people who have a NEED actually buying the ammo. Instead, to keep good face, businesses sell it at "normal" retail rates and only the hoarders and scalpers get the product.

If we'd let prices rise to meet the strong demand, then the price and supply mechanism would immediately close the feedback loop of scarcity -> hoarding -> price scalping -> scarcity. You want to see 22 LR back on the shelf? If we weren't crippling the free market with our accusations of "price gouging" every time a retailer raised prices to meet demand, then we'd have plenty of 22 LR on the shelves today.

 

[oneounceload]

Here's a video agreeing with your statements and asserting there is no such thing as gouging:

http://www.youtube.com/watch?v=h9QEkw6_O6w

 

[fxstchewy]

The lowly 22lr.

A round that is used very little if any in a mass shooting is becoming untouchable to most casual shooters..........boggles the mind.

 

[BSA1]

Here we go again. The Elite such as WinThePennant seek to disarm the poor by raising the price of ammunition beyond their reach even though the poor have higher crime rates.

The only real question is how many people the O.P. wants to prevent buying ammunition though his arbitrary price controls.

 

[BoilerUP]

Free market supply/demand curves are "arbitrary price controls"?

 

[Jlr2267]

Here we go again. The Elite such as WinThePennant seek to disarm the poor by raising the price of ammunition beyond their reach even though the poor have higher crime rates.

The only real question is how many people the O.P. wants to prevent buying ammunition though his arbitrary price controls.

I think he is arguing just the opposite of price controls. The prices today (in retail stores) are not reflecting a supply/demand equilibrium, therefore a perpetual shortage. If prices rose to the level that some remained on shelves and only those really needing it would buy, the inventories would soon rise, lowering prices eventually, with plenty of supply....

Or not

 

[No4Mk1*]

There has always been ammo for sale via auction sites for high prices so i don't see why you are complaining. If everyone raised retail prices it would ultimately supress manufacture as we wouldn't buy as much.

 

[81husky]

I have to agree with the OP. I won't buy any at 4 times the current price, but neither will anybody else (for the most part). When supply catches up with demand, guess what, the price will come down to where it's supposed to be. If hoarders and speculators are really buying most of it now, a very high price should take them out of the market.

 

[browningguy]

I love it when people with no clue about basic economic theory expound.

The so-called Free Market theories have nothing to say about extraordinary circumstances. Indeed almost all, except specialized theories, consider "normal" market conditions where supply and demand are maintained in relative equilibrium.

In this case we had a run on ammunition by people worried they would no longer be able to buy ammo by a specific incident. After the normal supply was bought up people found that only .22 was available, and then they began hoarding that also. Since there has been no new federal laws regarding ammunition people have stopped hoarding and now regular ammo is pretty widely available, but people keep hoarding the .22 for some reason. Even after a year this would be considered a very short term issue, factories did not have additional capacity (due to the previous supply/demand equilibrium) and it would not have been cost effective to build new supply. In fact if new supply was built beginning the day of the shootings they would most likely just about be ready to come online now.

The past 12 months of ammunition supply would in no way be considered a normal market by any economist. Price gouging is a very real occurrence , despite what the couch economist brigade say. There are even laws about it in many circumstances that are considered emergencies (aka abnormal market conditions). In this particular case I consider dealers who immediately marked up their prices to extraordinary levels to be price gougers, and I won't do business with them in the future.

 

[Cousin]

The price is already ridiculous.

I'm holding about 750 rnds. If I use it just for hunting it should take me to the grave.

I refuse to buy at the current prices, they can keep it.

Get a good 22 cal air rifle. I own a RWS M48, kills small game right up to Coon and Fox.
Pellets are still cheap too.

If people didn't buy at these prices the cost would come down.

 

[ColtPythonElite]

Raise the prices til the we quit buying and the stores flood with product and quit ordering to restock, then manufacturers can lay off employees and eventually shut the doors....sounds like a marvelous game plan.

 

[oneounceload]

The only real question is how many people the O.P. wants to prevent buying ammunition though his arbitrary price controls.

You seem to have that backwards. When my gas goes back to $1.65/gallon pre-Obama, then ammo can go back to being .02/round. Prices have gone up and supply has gone down and would have been corrected a lot sooner had the Walmarts et al, raised their prices ro reflect the current supply demand scenario at the time. Then those 4-6 guys who seem to buy up everything to sell at flea markets and online would have been stopped, demand would have slowed down and supply would have caught up

I love it when people with no clue about basic economic theory expound.

As do I, and you expounded very well.... .22 ammo is not considered a necessary item, and even if it were, if you watched the video I linked to, you would have a better understanding how this situation would have been resolved faster and earlier

 

[BoilerUP]

I love it when people with no clue about basic economic theory expound.

So where did you get your degree in Economics from?

Pretty big stretch to consider the current 22LR market as an "emergency" situation...

 

[WinThePennant]

Here we go again. The Elite such as WinThePennant seek to disarm the poor by raising the price of ammunition beyond their reach even though the poor have higher crime rates.

The only real question is how many people the O.P. wants to prevent buying ammunition though his arbitrary price controls.

You have it exactly 100% backwards and upside down. I wrote exactly the opposite of what you are accusing me of.

 

[WinThePennant]

I love it when people with no clue about basic economic theory expound.

The so-called Free Market theories have nothing to say about extraordinary circumstances. Indeed almost all, except specialized theories, consider "normal" market conditions where supply and demand are maintained in relative equilibrium.

In this case we had a run on ammunition by people worried they would no longer be able to buy ammo by a specific incident. After the normal supply was bought up people found that only .22 was available, and then they began hoarding that also. Since there has been no new federal laws regarding ammunition people have stopped hoarding and now regular ammo is pretty widely available, but people keep hoarding the .22 for some reason. Even after a year this would be considered a very short term issue, factories did not have additional capacity (due to the previous supply/demand equilibrium) and it would not have been cost effective to build new supply. In fact if new supply was built beginning the day of the shootings they would most likely just about be ready to come online now.

The past 12 months of ammunition supply would in no way be considered a normal market by any economist. Price gouging is a very real occurrence , despite what the couch economist brigade say. There are even laws about it in many circumstances that are considered emergencies (aka abnormal market conditions). In this particular case I consider dealers who immediately marked up their prices to extraordinary levels to be price gougers, and I won't do business with them in the future.

In effect, fear of public reaction is causing retailers to keep prices LOW. Which is acting exactly like a government inspired price control.

There is essentially a shortage. Keeping prices much lower than market forces suggest they should be, whether it is the government or retailers doing so out of fear of public reaction, creates the same outcome (in effect, deep and prolonged shortages and inefficient allocations). Shortages should lead to higher prices which would then increase manufacturing activity and supply (which then leads to lower prices and price / supply harmony).

 

[WinThePennant]

Raise the prices til the we quit buying and the stores flood with product and quit ordering to restock, then manufacturers can lay off employees and eventually shut the doors....sounds like a marvelous game plan.

When supply is high, price will drop, and there will again be harmony with price and supply. No one will be thrown out of work. Quite frankly, if we left this to the free market, this problem would be resolved in a very short time.

 

[WinThePennant]

There has always been ammo for sale via auction sites for high prices so i don't see why you are complaining. If everyone raised retail prices it would ultimately supress manufacture as we wouldn't buy as much.

The scalpers who are selling the 22 LR on auctions aren't stupid. They dribble it out a box, or a few, at a time. They know if they put everything on there at once that it would, surprise-surprise, push the winning bids lower.

 

[Arkansas Paul]

I have to agree with the OP. I won't buy any at 4 times the current price, but neither will anybody else (for the most part).

Really?
I'm not going to weigh in on whether or not they should raise prices or keep them the same, because I really don't have enough knowledge on the subject to know how it would effect the long term availability.
But to say no one would buy it at 4 times the going rate, who do you think made it possible for the gougers? It was the people paying $75-$100 for a 550 pack. If no one was buying at 4x the rate, the gougers wouldn't exist.

As far as the big chain stores raising the prices to reflect demand, that isn't going to happen. That's not the way big retail chains work. They go by profit margin percentages. Wal Mart and Bass Pro and other large corporations like them set prices, they do so according to what they had to pay for it. To get the prices to reflect the demand, the ammunition manufacturers would have to do the price raising.

 

[81husky]

But to say no one would buy it at 4 times the going rate, who do you think made it possible for the gougers? It was the people paying $75-$100 for a 550 pack. If no one was buying at 4x the rate, the gougers wouldn't exist.

You may be right. I just can't imagine paying that much for 22LR, and don't know why anyone else would either. I guess I'll just ration the stuff I have and hope that the market will stabilize before I need more.

 

[Jlr2267]

I love it when people with no clue about basic economic theory expound.

The so-called Free Market theories have nothing to say about extraordinary circumstances. Indeed almost all, except specialized theories, consider "normal" market conditions where supply and demand are maintained in relative equilibrium.

In this case we had a run on ammunition by people worried they would no longer be able to buy ammo by a specific incident. After the normal supply was bought up people found that only .22 was available, and then they began hoarding that also. Since there has been no new federal laws regarding ammunition people have stopped hoarding and now regular ammo is pretty widely available, but people keep hoarding the .22 for some reason. Even after a year this would be considered a very short term issue, factories did not have additional capacity (due to the previous supply/demand equilibrium) and it would not have been cost effective to build new supply. In fact if new supply was built beginning the day of the shootings they would most likely just about be ready to come online now.

The past 12 months of ammunition supply would in no way be considered a normal market by any economist. Price gouging is a very real occurrence , despite what the couch economist brigade say. There are even laws about it in many circumstances that are considered emergencies (aka abnormal market conditions). In this particular case I consider dealers who immediately marked up their prices to extraordinary levels to be price gougers, and I won't do business with them in the future.

It is not possible to price gouge non-essentials. Ammo falls into that category. Don't like the price, don't pay it. The next guy will be happy to take what you leave behind. Enough people pass on the price, it will come down. If everyone that sees it buys it all as soon as it hits the shelves, as now, the price is obviously too low.

 

[ColtPythonElite]

The price wasn't too low till people panicked.

 

[docsleepy]

Isn't WinThePennant correct?
Had prices risen commensurate with demand, wouldn't the equilibrium have been maintained, or at least restored? At some new pricepoint on the supply/demand curve?

According to T. Sowell (my most recent economic read, but like most of us, I took macro in college), whenever there is a price control, SCARCITY (which is always present for all products) becomes SHORTAGE.

Scarcity is when there is not enough for people to do whatever they want at no cost -- even WATER is not present in large enough quantity to eliminate scarcity.

Shortage is when you cannot find it at virtually ANY PRICE -- and this is close to where we are right now.

The "price control" was that established through the interaction of threatening observers and frightened vendors, who chose not to allow their prices to rise.

The poster who stated that such a system would cheat the poor is missing the point: the poor cannot buy 22LR *at all* right now! Had the price risen, the economically disadvantaged would still find adequate supply, albeit at a higher price, and they would adjust their purchases commensurately. Scalpers would have no possible profit had the price at Walmart risen appropriately, and all of us would be looking at shelves with 22LR present.

Much as they can be unpleasant, a free market beats most other alternatives.

 

[docsleepy]

And, had the price risen at traditional retail outlets, because 22LR would have REMAINED on the shelves, the "panic" would have been extinguished.



Now, of course we have had some price discovery, since currently the lowest price on gunbot.net is around .12/round -- a price at which I simply will not purchase. Hence I am not adding to the SHORTAGE. A perfect example of when the system DOES work properly. I will wait until the price falls to around .05 per round and replenish my stocks. One vendor is offering that price on a Black Friday sale and I may purchase (if possible) then.

 

[Sol]

I understand how supply and demand drive prices, but I don't understand how someone rationalizes paying too much for something where the raw resources, materials, manufacturing, labor and shipping costs don't even merit it.

Just like christmas years ago, people paying $500 for a tickle me Elmo. If you want to pay $500 for 18 cents worth of cloth and batting and a $2 dollar motor be my guest but I'm not that guy. If you want to pay $100 for $7 worth of lead brass and powder go ahead.

I'll wait people, will come to their senses eventually.

 

[Jlr2267]

I understand how supply and demand drive prices, but I don't understand how someone rationalizes paying too much for something where the raw resources, materials, manufacturing, labor and shipping costs don't even merit it.

Just like christmas years ago, people paying $500 for a tickle me Elmo. If you want to pay $500 for 18 cents worth of cloth and batting and a $2 dollar motor be my guest but I'm not that guy. If you want to pay $100 for $7 worth of lead brass and powder go ahead.

I'll wait people, will come to their senses eventually.

Everybody has a price point. For some, paying $50/brick of 22LR is no big deal...I won't, but I'm not going to criticize those that do. It is their money to spend however they wish.