Companies seek automation because they cannot meet demand or they want to increase their market share and thirdly, they cannot get enough people to do the work.
Companies go to automation because it is cheaper than paying the wages and benefits for workers.
There is a really rich Chinese guy (I can't remember his company name off the top of my head...3 letters though) who decided it was cheaper to hire a bunch of workers, rather than paying for high dollar automated machines. IIRC, they manufacture batteries.
There is never a shortage of workers. You can meet demand with either human or automated workers. Automation has no effect on ability to increase market share.Do you honestly believe the price of a car would go down if wages at GM were reduced.
Yes. GM car prices are cheaper in other countries where GM has factories, and those workers get paid reduced wages compared to here.I am not an economics major but supply and demand is basic.
Perhaps you should try to increase your economics knowledge then. I'd like to recommend www.mises.org
so you can learn the basics of Austrian economics.Wages do not affect what someone will pay for a product.
Correct. The consumer determines what they are willing to pay for a product. Wages affect what the producer sets the price at, regardless if anyone is willing to purchase the item at that price.
Do you think everyone in the oil industry just got a big raise?
No.Wages affect profits and profits do not affect prices.
Wages do not affect profits. Wages affect profitability, and profitability determines prices. There is a difference. Do not confuse the two.
If you stop buying gas it will come down.
If you stop buying gas, the Chinese will buy the gas you were going to buy. You do realize that more cars were sold in China than in the US last year, right?That is what every alternative energy source faces and why the alternatives will not reduce our dependency on oil. If the price of gas goes to 10.00 a gallon and stays there it will be replaced in a hart beat.
Why is it that the US built two refineries to produce an alternative energy automobile fuel that is cheaper to produce as long as oil is more than $40 a barrel. (When oil is less than $40 a barrel, it is cheaper to use oil.)
Guess what - we tore those facilities down because oil was cheaper back then. Oil went above $40 a barrel, and we have never rebuilt those facilities.
Guess who is building those plants to produce that alternative fuel? China.
There is an Air Force base (Wyoming?) commander begging someone to build one of those plants on his base to ensure his jets have fuel too.
Just because something cost you more to make does not mean you can charge more for it.
That's correct - you also have the option to not produce that product anymore. You can raise prices, or you can lay off the workers and close the doors.If you could it was underpriced. The fact that the oil companies can raise the price of gas in an instant whether it is speculation or not means it is underpriced.
Part of the pricing of an item is the cost to produce it. If the cost to produce the item increases and you raise the purchase price, it does not mean it was underpriced before. It means the input costs affected the selling price - inputs increased, so the selling price was raised.so if you raise the price of gas you should sell less. That is not happening with gas.
It happened when gas hit $4 a gallon here. Where have you been? People stopped driving as much. I have a friend in Netherland who rides his bicycle 20 miles to work in Belgium so he doesn't have to buy high priced gas. He is an engineer, and also purchased his first vehicle at 28 - a Kia.The oil companies are proving that they can set the price higher and it still sells. People will just pay more for it.
The oil companies are showing that there are more buyers coming to the market to offset the losses in gas consumption by individual consumers.There is no alternative for the consumer right now except other gas stations.
Actually, there is, but people choose to be ignorant about other options.
When I was in high school, a fellow student had a pickup truck that ran on compressed natural gas. He filled his tanks at home on the farm with an air compressor hooked to the well.
I know other individuals with CNG vehicles, and even a local CNG dealership for CNG vehicles. I even know businesses that run their fleet vehicles on CNG.
Quite a few local people use horse drawn carriages to get around.
I am seeing a large increase in people riding bicycles for transportation - it's not just for kids anymore.
Keep in mind that Germany has no oil - so how did Hitler get fuel to run all his tanks and machines?