If there is a cartel, it is likely to be tested over the next few years because after several years of rapid expansion, plasma supply seems to have caught up to demand and could soon exceed it.In fact, the resource of plasma is being supplied by donors to demanders. In this case, the demanders are plasma companies. The price of plasma donations is found at the point where supply meets demand. Without market distortions caused by, for example, government intervention, demand can't "exceed" supply (so long as price is free to adjust). The curves are totally unrelated to one another (click to enlarge):
One sign is that in Eagle Pass, payment for two weekly donations has dropped to $60 from $80 earlier this year.
Monday, December 7, 2009
Is money tainting the plasma supply?
Andrew Pollack's New York Times article "Is money tainting the plasma supply" (December 5th, 2009) fails to properly describe the notion of equilibrium price in the market for plasma donations.