CovOps
 Location : Ether-Sphere
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 |  Subject: Funny: Stuff Elon says  Thu Jan 31, 2019 10:13 pm | |
| Elon Musk is often dubbed a genius.
And yet... if the following statement Musk made during the Tesla Q4 earnings call is anything to go by, he has a habit of stating the obvious and thinking it sounds deeply profound and insightful:
The demand for - the demand for Model 3 is insanely high. The inhibitor is affordability. It's just like people literally don't have the money to buy the car. It's got nothing to do with desire. They just don't have enough money in their bank account. If the car can be made more affordable, the demand is extraordinary.
So, to help introduce Elon to the concept of how demand and supply interacts with price we thought we'd take the above quote and adapt it according to various economic scenarios in classic econ text book style.
Scenario one: Private jets
Johnny is a labourer on minimum wage. Johnny idolises the pop star lifestyle. He (like Elon) especially loves private jets. There are many people in the country who think and get paid like Johnny.
Which of the following statements is true:
a) The demand for private jets is insanely high, the inhibitor is affordability.
b) It's just like people literally don't have the money to buy private jets.
c) It's got nothing to do with desire.
d) They just don't have enough money in their bank account.
e) If private jets can be made more affordable, the demand is extraordinary.
Scenario two: Designer clothing
Maria is a waitress on minimum wage. She idolises the Kardashian lifetylse. She dreams of being draped in designer clothing. There are many people in the country who dream and get paid like Maria.
Which of the following statements is true:
a) The demand for designer clothing is insanely high, the inhibitor is affordability.
b) It's just like people literally don't have the money to buy designer clothes.
c) It's got nothing to do with desire.
d) They just don't have enough money in their bank account.
e) If designer clothing can be made more affordable, the demand is extraordinary.
Scenario three: Private islands
Kevin is an extreme libertarian who has lost his life savings on crypto investments. He dreams of owning his own private island with a monstrous monogrammed castle, and paying zero income tax. Sadly, there are many extreme libertarians who think like Kevin in the country and have wasted most of their income.
Which of the following statements is true:
a) The demand for private islands is insanely high, the inhibitor is affordability.
b) It's just like people literally don't have the money to buy private islands.
c) It's got nothing to do with desire.
d) They just don't have enough money in their bank account.
e) If private islands can be made more affordable, the demand is extraordinary.
Scenario four: Nissan Leafs
Elizabeth is a teacher. She earns the average national salary. She dreams of saving the environment but needs a car to commute to work. There are many people in the country who think and get paid like Elizabeth.
Which of the following statements is true:
a) The demand for Nissan Leafs is insanely high, the inhibitor is affordability.
b) It's just like people literally don't have the money to buy Nissan Leafs.
c) It's got nothing to do with desire.
d) They just don't have enough money in their bank account.
e) If Nissan Leafs can be made more affordable, the demand is extraordinary.
If you answered "true" to all the points in all the scenarios apart from the ones in scenario four, you will have passed Econ 101. What you may or may not have concluded from the exercise is that Teslas are to Nissan Leafs what Private Jets are to Ryanair travel.
In next quarter's trading update, Economics 101 will look at the definition of demand and why it doesn't actually equate to dreams and desires of purchases as much as the amount of a product people are willing to buy at a certain price.
We may or may not look at how many CFOs are needed in a trading year to oversee the financial dealings of an average car manufacturer.
https://ftalphaville.ft.com/2019/01/31/1548940442000/Stuff-Elon-says/
Hey! Elongated Musketeer!
Read this, pronto:
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RR Phantom
Location : Wasted Space
Job/hobbies : Cayman Islands Actuary
| | Subject: Re: Funny: Stuff Elon says Fri Feb 01, 2019 1:24 am | |
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