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So, today over at Bloomberg, I read yet again in my life, others passing along fallacy as knowledge. This time, Bloomberg writers Lorraine Woellert and Victoria Stilwell have typed a piece fraught with intellectual deficiency revealing significant knowledge defects with respect to commerce and hence economics. Lorraine Woellert and Victoria Stilwell suffer In their entire article, they conflate costs and prices.
Costs and prices aren't synonyms. Cost is outlay. Price is a rate.
Writing "The average cost of regular gasoline reached $3.57 a gallon yesterday after being as high as $3.68" reveals stupidity.
Rightly, if Woellert and Stilwell knew anything about trade, thus economics, they would have written The average price of regular gasoline ...
$3.57 a gallon is a rate — $3.57 sold for every one gallon bought in a purchase and sale.
Spending $35.57 for 10 gallons is an outlay, which also gets said as cost. It's the cost to drive X number of miles.
Again, a price is a rate of trade. A cost is an outlay.
All winning bidders might face the same price, but their costs could be different. Grandma might drive 10 miles a month. You might drive 10 miles twice a day. Your costs would be different even though the price each of you pay is the same.
Also, prices don't arise from costs. Prices adhere to the one, true infrangible law for the whole of trade — the Law of Prices. The Law of Prices holds the winning bids of purchase and sale in the face of what is on offer set the price.
If costs set prices, which is Ricardo's fallacy, then no firm need go out of business. Firm execs could merely raise prices to cover costs.
Inflation is excessive credit beyond trade needs. Never in the history of commerce and banking has inflation meant rising prices. Rising prices is an effect, not a cause. Too much credit — Fed Res bank notes and checkable deposits — for the output of all firms reveals inflation.
Bloomberg gets an F.