71 votes

Why do Australian milk farmers need to protest supermarkets' milk price?

I would like to contradict Kenny LJ explicitly on his claim that "the free market works". It only works if the market is actually free, i.e. competition exists. Which, you can argue, is not the case ...
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13 votes

Why do Australian milk farmers need to protest supermarkets' milk price?

Getting milk from the dairy farm to the retailer is too expensive for individual farms to manage on their own, with transporting, processing and packaging. There are also a host of consumer and health ...
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9 votes

Effects of Eliminating Government Controls on Supply (organ donation)

The Iranian organ market It might be worth looking into the organ market in Iran. Unlike in other countries, it is legal to sell your kidney to patients who need a new one. The process is regulated ...
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8 votes

Why do Australian milk farmers need to protest supermarkets' milk price?

Not sure about Australia, but in America it's quite common for a large retailer to simply dictate to the producers the price they will purchase the commodity from them for. If a farmer's primary ...
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7 votes
Accepted

Why do we spread knowledge across nations?

This is a long comment that is too long for the comment box. In fact, many research projects in US are secretive, especially the ones related to military. At the same time, much, much more research ...
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7 votes

Why do Australian milk farmers need to protest supermarkets' milk price?

Other answers and comments have outlined the general economic principles at work here. Here are the details unique to Australia: Two companies, Coles and Woolworths, control the majority of the ...
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5 votes

Effects of Eliminating Government Controls on Supply (organ donation)

One example of what you are looking for would be drug prohibition. A drug prohibition cannot effectively eliminate drug supply only suppress it so I suppose that would qualify as control of supply. ...
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5 votes

Why do Australian milk farmers need to protest supermarkets' milk price?

Farmers cannot operate as ideal model businesses that can just turn off and on without impact. Only large corporations can even approach that level of abstract capitalism. More specifically farmers (...
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4 votes
Accepted

Is there any research, theory, or anything which shows how much of a market has to be in power of a few companies to be a force against free market?

The quote in the question isn't really rigorous about what a free market is, but it talks about monopolies and artificial scarcities, so I am interpreting the efficient outcome with price equal to ...
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3 votes

What are possible solutions when promoting competition is not applicable?

There is one universal "solution" to monopolism without government intervention. Just allow the monopoly to do its worst. It will give very strong incentives to find ways to satisfy needs of ...
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2 votes
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Which economical consequences could happen to a country if it forbiddes importing cars?

1- Some basic macroeconomic fundamentals I highly doubt a trade imbalance is causing high inflation. The trade deficit is likely happening because of economists call "Twin Deficits". I'll spare you ...
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2 votes

Is it the most efficient to allow free transactions in financial markets?

As a part of the overall financial system, such instruments can increase market efficiency and facilitate exchanges. Since all such instruments are essentially backed by government monopoly rights (...
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1 vote

Researching the "invisible hand" in academic literature

tl;dr Your description of an invisible hand is a straw man, and academic literature typically avoids straw man ideas. When it comes to proper non-strawman version of the invisible hand argument there ...
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1 vote

What are possible solutions when promoting competition is not applicable?

Leaving aside the cases of platform markets and other externalities and natural monopolies, what people who have no training in economics usually miss is question of the size of the market. It may ...
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1 vote

Understanding distortions in investment in human capital

I assume WH Hutt is referring to long-term effects. Here's what I understand. If "the price of any commodity is raised above the free market level by strike threat or action or by state edict," so ...
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1 vote

Why do we spread knowledge across nations?

I might be wrong but the key point is the perspective. From your question I saw a very interesting word: enemy. I understand that some entity would be against ...
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1 vote

Why do we spread knowledge across nations?

As "High GPA" has rightly pointed out, most of the military and national defence research tends to be confidential. Added to that, any specific area where having some specific knowledge can ...
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1 vote

Why do Australian milk farmers need to protest supermarkets' milk price?

Your economical assumptions are completely correct. There are too many farmers/dairies and the least profitable should shut down. What you are missing is that the least profitable farmers are, well ...
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1 vote

Value vs. Price and its relation to tariffs

At a market equilibrium, marginal cost and marginal utility are equal. This does not mean that the cheaper good is preferred. Note that the US imports primarily higher quality steel at a higher price,...
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1 vote

Value vs. Price and its relation to tariffs

You asked "why is cheaper always being preferred". Well, it's not. People routinely pay more for quality. Cheaper is almost always preferred for identical products. But cheaper is not always preferred ...
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1 vote

Free market defense against anti-competitive behavior?

Depends on what you mean by 'possible'. The liquor stores in your example could form a union, and collectively bargain with brands. Then if a brand breaks a contract with one of them, they all break ...
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