arjun on Nostr: In a free market, wealth inequality is good for the poor. For example, airlines offer ...
In a free market, wealth inequality is good for the poor.
For example, airlines offer First, Business, and Economy classes to charge different prices for different (and unequal) levels of comfort and service.
Those who purchase higher-priced tickets for extra comfort help cover the fixed costs of the airline, enabling it to offer more affordable prices for economy seats.
If the government were to mandate that airlines only offer economy class tickets, airlines would not be able to segment the market effectively.
They might need to increase the price of economy tickets to cover costs, especially if they can’t charge premium prices to other passengers.
This would limit accessibility for budget-conscious travelers, reducing overall consumer satisfaction, and potentially leading to less efficient use of airline capacity.
So, inequality is not the problem. In fact, it may be beneficial for the poor.
For example, airlines offer First, Business, and Economy classes to charge different prices for different (and unequal) levels of comfort and service.
Those who purchase higher-priced tickets for extra comfort help cover the fixed costs of the airline, enabling it to offer more affordable prices for economy seats.
If the government were to mandate that airlines only offer economy class tickets, airlines would not be able to segment the market effectively.
They might need to increase the price of economy tickets to cover costs, especially if they can’t charge premium prices to other passengers.
This would limit accessibility for budget-conscious travelers, reducing overall consumer satisfaction, and potentially leading to less efficient use of airline capacity.
So, inequality is not the problem. In fact, it may be beneficial for the poor.