The evolution of cars - a thought...
Lately cars are are becoming more and more reliable and long-lived. They also look more and more gorgeous. However, they become more alike in their looks, and are built in globalized fashion - with components and cars themselves coming from everywhere. For example, such high end car as Audi TT is built in Hungary, of all places.
In short, a car, while getting better, is quickly becoming a commodity. And just as classical economic theory predicts for any commodity, its price is falling.
Indeed, a roughly 30hp 1919 Ford Model T retailed for about $19,000 (in 2007 dollars). Ninety years later, a low end 30hp 2009 model by Tata Motors (with lots more bells and whistles than Ford T) will retail for $2500.
Which makes me wonder - why is it that classical economic model does not work for medicine?
In short, a car, while getting better, is quickly becoming a commodity. And just as classical economic theory predicts for any commodity, its price is falling.
Indeed, a roughly 30hp 1919 Ford Model T retailed for about $19,000 (in 2007 dollars). Ninety years later, a low end 30hp 2009 model by Tata Motors (with lots more bells and whistles than Ford T) will retail for $2500.
Which makes me wonder - why is it that classical economic model does not work for medicine?