economics: why do sellers take advantage of consumers?

Answer 1

The purpose of a business is to make a profit, so sellers have to convince consumers to buy their products. To say that sellers take advantage of consumers would mean that consumers are stupid cows that believe whatever they see on TV or hear on the radio or read in newspaper ads. We know that's not true. Sure, some people are more easily swayed than others, but for the most part consumers do research before they buy.

Answer 2

Sellers do not take advantage of consumers. All trades are mutually beneficial. If they were not beneficial, an individual would not engage in them unless they were threatened with a gun pointed at them. It has to do with the supply and demand curve. Where supply and demand meet, there are two areas called producer and consumer surplus, meaning that an individual would have been willing to pay this much more for the product. I believe your statement reflects price discrimination, where sellers try to get the most out of each consumer that they can. While this may seem a bit unethical, the consumer still gets a product that he values at least as much as he pays. He is then not getting taken advantage of. If he didn't want the product, he could let it go.

If you are referring to price gouging, there is no such thing. Consider this: During Hurricane Katrina, the price of generators went very high. Many people attributed this to price gouging. It wasn't. It was supply and demand at work. Yes, the poorer people in the economy could not afford the generators, because the higher prices were being paid by individuals and entities that needed them to keep the area going. Is it more important that I have a generator, or that the hospital, grocery market, or other place which provides an essential service to have it. Obviously, these bigger places will be able to pay a higher price than I can, but that does not mean that the price is being gouged.

Sellers taking advantage of consumers is a common misconception.
Hope this helps.

Answer 3

No seller can exist that way. Competition keeps check on those sellers who take advantage of consumers. Duped consumers do not forget the seller easily, so they do not buy from the bad seller.

Laws of Market govern everything and everybody to keep things on track.

Answer 4

Same reason consumers take advantage of sellers. Ever seen a going out of business sale? Sweeeeet

Answer 5

Because of imperfect information. Consumers think they're getting a good deal, sellers know they're not.

Put it this way: all things known, the surplus is generally split evenly between buyer and seller. Thus, game theory predicts that competition primarily takes place in the form of disagreement over information, ie what is and is not known.

Answer 6

Sellers rarely take advantage of consumers BUT unlike the post above - transactions re not ALWAYS mutually beneficial.

The best example today is credit card companies. They are able to raise interest rates at any time, they don't have to wait on you to be late. When they do raise this rate, your payments are more for interest and therefore it is harder to get out of debt.

That is only beneficial for the company because by keeping you in debt, you are a MORE profitable customer than one who pay does not carry a balance (which credit card companies hate by the way).

Also, these very same companies charge you interest on your ENTIRE balance even when you paid a portion of it - they do this using the "Average Daily Balance" method to calculate your payment - meaning that you pay interest on money you already paid off.

This is why the top execs of Chase, Citigroup and others had to go in front of Congress and explain themselves.

What can a consumer do when ALL the banks do this though? Sue them - Citibank had to settle a class-action lawsuit in 2001 for $45 million for improper assessment of late fees

Answer 7

If we had perfect competition, there would be no disadvantage. But we don't.

A firms raison d'etre is to maximize profit. If competition is poor, misinformation is rampant and many situations exist where one or a few companies can affect the price, consumers can get skewered.

To say that consumers find such a distorted price beneficial, else wise why would they pay, is not a fair comment when talking about essentials such as heat, drugs, or required insurance.

Peace

Answer 8

To sell and make money.
Many people are brought up by the influence of money. Their mothers and fathers work long hours, for money, even when they have plenty. The mothers and fathers teach their children the spoils of life, and spoil the children with luxury. The mothers and fathers teach them to make money, even to disregard honesty.
If not, how do you explain how the political class sells the American People out by getting big sums of money from deep pocket businesses?
How do you explain the CEO's high paying salaries and their theiving opportunities for more money?
How do you explain, very well off people running non-profit organizations and collecting very big salaries?
How do you explain the educational system in the U.S. being below impoverished countries?
How do you explain oil going to the roof and no innovations to curve the appetite for our dependency of oil?
How do you explain to people of fortune, that others in misfortune are there because of their misfortune, no economic ladder, no opportunities, a life over taxed?

Answer 9

Why do "consumers" buy from these sellers if they're being taken advantage of?

Answer 10

well this is easy......

simple FOR MONEY!!