Hacker News Reader

Imagine you buy for X, and sell to some supermarket for Y, and they pay you in T time.

Optimum Y is not related to X, but the price when you replace the stock. ( let's say X2 ) When supply has problems, or economy is unpredictable, it is harder to predict X2, so usually your estimation is a bit off.

So you have to have bigger margin to cover for this estimation error. ( assume the worst )

View on HN

So they increase margin to cover for uncertainty and incorrect estimations. And in case the original estimations were right, the higher profit is just unintended consequence.

Since it's not market optimal, after they note the extra profit, why don't they lower the prices or hire more workforce or expand? Or at least share the windfall with employees indirectly boosting the economy total, including their own position?

(Yes, equilibrium economics is a joke even when law of big numbers is involved.)

Reply on news.ycombinator.com