Minimum price for offers (all offer forums)

Originally Posted by Bryan Le

I don't think we should ever incorporate this. Besides the fact that designers should be able to price their work at whatever they feel it is worth, and what it will sell at, it is simple economics that if you incorporate something like this, it will fail.

This tactic is called a "Price Floor" - a set price by an overseeing organization that no business may price under. Governments have tried repeatedly to incorporate either a price floor, or a price ceiling in many situations that a market was failing in order to help it out. In almost every case, it has failed.

So if you set a price floor, you will end up getting something like this:



Now, for some of you guys who won't understand this, let me explain...

Right now, we have a decent price equilibrium - a normal price that is about an average of $40.00 (marked P(e)) per design sold. We have a decent number of buyers (marked Q(e)).

By messing with the pricing, and incorporating a price floor (to say $80.00) - marked P(1) - you will increase supply - more designers will want to sell. However, this will lower demand, and now no one will want to buy any designs - marked Q(1).

This will create what's called a "market failure" in which the only designers that prosper are the ones that are already in the market...or in our case, the good designers with a reputation. The little guys, or the ones that need money quick, or want to get rid of something, will never be able to make any money at all. Furthermore, you'll drive potential customers from all of us because no one wants to be forced to pay a minimum of $80.00.

Sorry to give you an essay, but I felt that I had to make a strong arguement before this rule was enacted. It'll kill the marketplace, and it'll make a lot of designers suffer.

Sorry, I took a couple courses in economics.