Reply To: Cartels and profits

#17827
jmherbener
Participant

As you suggested, there’s no apriori way to know if producing and selling a less durable product generates more net income than producing and selling a more durable product. What we do know apriori is that entrepreneurs economize for society at large by selecting the alternative that renders the most net income. In producing any non-perishable consumer good, e.g., cars, computers, refrigerators, lawn mowers, houses, light bulbs, etc. entrepreneurs have a choice between producing more and less durable alternatives.

Take a look at F.A. Hayek’s rebuttal of Galbraith:

http://library.mises.org/books/friedrich%20a%20hayek/The%20Non%20Sequitur%20of%20the%20Dependence%20Effect.pdf