Quote:
Originally Posted by petrucci
Let us consider the Twlight novels. Their price is largely determined by their publisher, Little Brown. If Brown wants to raise prices, and the books are not fungible, then they can do so with impunity, as the product is not interchangeable with any other. No collusion with other publishers is necessary. You must pay what Brown asks to obtain a Twilight book.
However, one cannot just raise the price of something like gasoline, which is fungible. Consumers will just buy a cheaper brand, as you pointed out. Thus companies collude to raise prices as a group, giving consumers no alternative but to pay more, regardless of which brand they buy.
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The word fungible doesn't mean what you think it means. It does not mean that there exists
no other substitutes. It is about the degree interchangeability. It's not an either/or situation. A bushel of corn is highly fungible, because it is interchangeable with any other bushel of corn. If someone can't get a copy of Twilight, there are other books that they might reasonably select, but that doesn't make it non-fungible. It isn't generally interchangeable - not just
any book will do.