Where is the line between acceptable profit and taking advantage of your fellow Americans?

Question

Hasn't Capitalism sometimes created more problems than solutions in fair business practices??

I mean take technology for example. The first company to develop a new gadget determines the price of that gadget based on what? What they think people will pay for it? Eventually there is competition to lower the original price but sometimes even then it's still ridiculously expensive.

When was the last time a CEO took a pay cut during down time? Versus the people laboring who either get cut or get a dime raise at the beginning of the calendar year?

It's out of balance IMO.

Answer 1

I honestly could care less what the CEO makes. Thats between him and the board of directors...it's their company. What I do have issue with is large corporate entities that assimilate all of the competition to a point where they are in monopoly or near monopoly existence. I think it benefits no one that there are only five major players in health insurance. They are selling a product that, quite frankly, is as much a necessity these days as electricity or gasoline. Can the consumer effectively stop using their product and survive in today's society? What is to stop them from working together to gouge the consumer? When there are only a few really big fish in the pond, the likelyhood for corruption and abuse of the consumer increases dramatically.
Like it or not, some sort of counterbalance is needed. In the case of utilities, most states have a public utilities board that caps the rates an energy company can charge it's consumers. Can you imagine what would happen if that stop wasn't there? They could charge you and your neighbor whatever they want for electricity and you would have to pay it because of lack of competition.

Answer 2

Boy, I believe one of the CEO's in an auto company took a cut within the last year or so. Even so, that's not the norm and certainly a valid criticism of corporations.

But it doesn't some new gadget to get a high price. Ever drink coffee at Star Bucks? You can get a cup much cheaper at a lot of places, yet the buyers come back. That's the point of a free market, the buyers are freely willing. They aren't forced to buy something because it's the only choice like in the old Soviet days (and that's if they even had your item in stock).

Moral of the lesson. If you don't like the price, don't buy it, it's your choice.

Answer 3

This answer isn't the total picture, but I will do my best; Research into new technology, for example not only takes time, but is expensive. Now it has to have a prototype, then it needs to be tested, and developed. Finally it may have to pass government standards. All this costs dollars in funding the concept but the production, plus other costs of marketing, advertisers etc.
I have not included the labor or the machinery it takes to build this. Now to get it out to the test markets, getting buyers and delivery..........
Why would someone who has spent so much time on a project take a pay cut? What is unfair? I do not understand the logic

Answer 4

They set the price based on market factors.
What will people pay, yes.

You mean they have to bring it down even though people WILL pay what they ask? Why do they owe you that?

The CEOs is a problem, but for the company, not for you. If they lose money paying high salaries, that's their problem. If the CEOs can get that much for what they do, that's theirs to achieve. Yours too, if you made the effort.

Amazing how people who don't want to make the effort always think that everyone else has to adjust to them.

Answer 5

Beyond Government price controls (which do not work) what do you suggest? Profit on jewelry is excessive (20-50%) and no one complains, another business runs a four percent profit margin and people scream "Price gouging". If the price controls come about take on the companies with the thirty precent profits first.

Answer 6

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Answer 7

The price is determined in part by the cost of developing the product and the initial cost of producing the product. In the end it is the customer who determines the price if they think the price is too high they wont buy the product.

Answer 8

The line is where the buyers draw it. When the price is to great the buyers do not buy. Profit = value - cost.

Answer 9

man wats is a fellow american hahahahhahaha they look at us like wolves look at retarded antelope keep on smoking weed and watching nascar and the veiw trust me they will save u when the world colapses
oh and keep hating ur fellow americans its a great strategy isnt it watch em figth and as we fight they make off with all the stinkin money keep on watchin bet hating whitey and keep on watchin blue collar tv and keeping ur eye on them brothers oh and as for the yuppies keep ur eye on them latinos they are the real problem keep staring down the ladder while they take a dump on u from above

Answer 10

Why is a CEOs work and salary worth so much more the VP below them, let alone middle management or their executive assistant or even the person who cleans their office?