As for the market, it does not all come down to supply and demand.
If that were the case all the people in one jurisdiction would be driving Ladas or suchlike.
The truth is far more complex.
Different people supply different goods at different prices.
There is not just one market for even one good or service, but several.
You are both right and wrong here.
First of all, prices are the result of supply and demand and nothing else. On the supply side a producer puts a certain subjective value on a product. On the demand side a buyer does the same and both try and meet at an agreeable point. Some people may be quite happy to pay more for a product produced in a certain location or a certain way while others just want the cheapest product. It is all entirely subjective.
You are right though about the whole thing being extremely complex, with even similar products essentially being very different. Prices differ from location to location based on the subjective valuations of individuals. The average, which we often see quoted in market prices of raw materials or share prices, is just that, an average of millions or even billions of subjective individual decisions. This is precisely why an economy and the prices of its products cannot be managed by a central organisation, it is simply too complex.
And sometimes these differences are perceived and not actual and prices can go higher!
That's good marketing and product differentiation - think of
the Müller yoghurt ads with Joanna Lumley.
Yes, marketing is designed to distinguish your product from others and make it stand out in some way or another. But all that results in, is that initially very similar products, like yoghourt, are essentially being devided into different products altogether. The people that buy Müller yoghurt probably don't care too much about Tesco's own brand and vice versa. But this is the beauty of an open and free market where peope are totally free to decide what they perceive as good and bad value, and then vote on this by either buying or not buying.
Most business customers understand that others have to live and to make enough today to continue in business.
And most layperson consumers aren't so bloody minded as to expect people to beggar themselves.
Their own children may be seeking employment in such businesses so there is a balance struck.
People decide on what they are willing to pay for a product based on what they can afford. Some may feel generous, compassionate or charitable to pay more, but that does not generally come into the decision making process. Look at LCD TVs for example. The price of these has been driven down ever more in recent years (a 40" TV cost €10,000 just ten years ago, and can be bought now for about €500), but this has been a good thing for producers of TVs and has made many many more jobs available for the workers who make them. It has also been tremendously good for the general public especially poorer people who never were able to afford such things. This is the power of supply and demand in a competitive market.
Using your argumentation we would be better off paying more for these items to ensure that workers possibly get a higher wage in the future, when the exact opposite is true. The price of a product in isolation does not dictate the wage of the worker. What dictates the wage of the worker is the profitability of the employer, and employers generally are more profitable the more products they sell.
Your argument of "overpaying" for a certain product then also ignores that some other business will lose out. For example, let's say I need a table and rather than pay €100 I pay €150 for the reasons you outline. This means that I have €50 less to spend on something else, like a lamp to put on the table. The action has essentially reduced the need for lamp makers. Overpaying for goods drives up the average price which has the most detrimental effect to the poorer people in society who cannot match those prices.
Thinking about economics in some idealized impersonal way is where monetarists fail.
You are using the term monetarists wrong here. Monetarism is a monetary theory and not one of price or supply and demand.
In terms of the professions, apart from familial issues, most are mobile and their professional competences are transferable.
Sometimes prices don't even fall to near to the break even level - its easier to supply a different product or service or relocate.
The aftermath of driving professionals to relocate or to supply other products is that when the market recovers there are shortages.
And this sends the cost of professional services skyward again - so there is a benefit in not pile-driving professional fees through the floor.
The same thing occurs in a recovering retail market, where accumulated profits can help weather the lean times, but then sales prices rise with the market to recoup losses.
This is part of the drivers of rapidly rising prices that can follow a recessionary period - retailers and the like trying to claw back their missing profits from the lean years.
Very good points here, but you have to bear in mind that it is mostly government intervention that massively drives up needs for certain professions. An obvious example in this country would be engineers, architect, bricklayers, etc. In my own profession IT, it was the Y2K and easy money policy in the late 90s that drove the "need" for IT professionals through the roof. It was a good thing that this was corrected, and it was a good thing that no artificial demand was created in the IT industry after the bust; the industry very quickly recovered and lots of people retooled.
Essentially the problem is not the now low demand, the problem is the artificially increased demand.