Quotation of the Day…

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… is from page 86 of Ryan Bourne’s paper “Prices and Price Controls: An Introduction,” which appears in The War on Prices: How Popular Misconceptions About Inflation, Prices, and Value Create Bad Policy (Ryan A. Bourne, ed., 2024):

A lot of public discussion of prices takes place as if all prices are administered prices, in the sense of businesses having free rein to set them at whatever level they wish. In the real world, market prices rise and fall because of shifts in supply and demand. Firms can only profitably charge prices that (a) consumers are willing to pay and (b) competitors (current and potential) cannot easily undercut. A company may notionally set its own prices, but in anything other than the immediate term, the price it can sustainably charge is dictated by these broader forces.