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but dont confuse market price with intrinsic/underlying value
put it this way... if it
physically costs a farmer $0.50 to grow enough wheat for a loaf of bread
physically costs a bakery $0.10 to bake the dough into bread..
physically costs a truck driver $0.01 to deliver a loaf to a retailer
the bakery will not sell it to a retailer for less than $0.61
if the retailer has all its stock/shelf fillers and cashier labour costs and profit margins to meet share holders expectations. and refuses to sell for less than $1.50.. by putting a price ticket up for $1.50
guess what. a customer cant just say "im willing to pay $0.50, so heres 50cents, im taking the loaf, thank you, bye"
a retailer would rather call the security guard over and stop that customer leaving with the loaf.
the customer is instead going to pay what the retailer offers... not the other way round
breads intrinsic value is not the $1.50. . (the market PRICE is not the intrinsic value.. )
the intrinsic value (in my example) is somewhere above $0.61 but below $1.50(i never mentioned retailers true minimum costs added)
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Idk, what if for another farmer it will cost $0.30 to grow enough wheat for a loaf of bread, and for another bakery it will cost $0.05 to bake the dough into bread? What's the "intrinsic value" of a loaf of bread then?
I'm not an economist, but I still think that the "value" of something is what people are willing to pay for it at the moment. Please correct me if I'm wrong.