The world is deflationary! nostr:npub1s05p3ha7en49dv8429tkk07nnfa9pcwczkf5x5qrdraqshxdje9sq6eyhe
In competitive markets, everything tends towards its marginal cost due to factors like competition, efficiency, and consumer demand.
Firms optimize production to align marginal cost with marginal revenue, ensuring profitability. Technological advancements and economies of scale drive down costs, while consumer preferences influence pricing.
Arbitrage corrects price differentials, guiding prices towards marginal cost. Over time, markets reach equilibrium where prices reflect production costs, maximizing efficiency.
Though external factors may temporarily disrupt this balance, the inherent dynamics of competitive markets naturally steer production towards its marginal cost.