Isn’t this the most lovely surprise – supply and demand applies even to Farmers’ Markets. Those little diagrams at the beginning of absolutely every economics textbook are true, a realistic representation of the way humans behave in this, our, universe. That is, the number of people willing to buy overpriced vegetables exists, but is small, rather smaller than can support the number of people willing to sell at those high prices.
Gosh, who would have thought it? Except, obviously, everyone who has ever thought about the idea. For those supply and demand curves were originally drawn in response to observation of simple markets. In English at least a market originally meaning exactly what we today call a farmers’ market. The varied growers of stuff bring it to town on one day a week and try to sell it to the varied potential consumers of foodstuffs. Our descriptions of markets are drawn from observation of what happens next. Thus it really shouldn’t surprise that what happens now is what happens in the textbooks. Expensive stuff doesn’t have all that many buyers.
Add in that there are fixed costs to a market stall, as well as those variable ones dependent upon volume of sales and we’ve the complete explanation for what happens:[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Why Are So Many Farmers Markets Failing? Because The Market Is Saturated[/perfectpullquote]
Who could not predict this from the first three pages of any economics text?[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Nationwide, the number of farmers markets increased from 2,000 in 1994 to more than 8,600 in 2019, which led to a major problem: There are too few farmers to populate the market stalls and too few customers filling their canvas bags with fresh produce at each market. Reports of farmers markets closing have affected communities from Norco, Calif., to Reno, Nev., to Allouez, Wis.[/perfectpullquote]
The lack of buyers is because such markets are expensive. The lack of sellers is because volumes of sales won’t cover those fixed costs of setup. And there we are.
Now, given that we can see that these market basics are in fact true, that Econ 101 does describe the real world, when will everyone admit and agree that they apply to labour markets and the minimum wage, to housing and rent control, to taxation and the Laffer Curve?
Hmm, what’s that? Because? Yes, but because what? And we’d like to see your workings too please. Supply and demand really does work with price as the third variable. Yes, for tomatoes, even heritage ones, as much as for work and housing.