The more developed the economy, the shorter channels tend to be. Why?

Question

The more developed the economy, the shorter channels tend to be. Why?

Answer 1

what do you mean by shorter channel?

Answer 2

I assume by channels, you mean channels of distribution, and by shorter, you mean the least cost.

Rule of utility maximization states that as individuals we will collectively work to create the most of what we value highest in our lives, which means economic profits will be made- until competition enters the market and then you can only make normal profits.

There is a composite of all of the markets Average Total Cost Curves, shaped like the bottom half of a semi-circle. the point in the center is called pure economic efficiency. any point to the left, and it is called economies of scale, which means that you must produce more to drive cost down. on the opposite spectrum is called diseconomies of scale, and is created when an economy is operating at a short run point outside of its production possibilities curve. it means that the economy is outside of its carrying capacity so the market will start to raise prices to crowd out this effect.

this all falls under the least cost method of production, and is subsequently why the most developed economies in the world have the shortest channels, because its is the most cost-effective way to sell their product/service.

Answer 3

Simply put, it's because people in in the developed countries have more net-worth PPP than people in developing countries. So, purchasing-power is more and to limit people's consumption (so that they don't consume everything), most prices are intentionally raised to reduce their purchasing-power. Otherwise, we would become the GREAT CONSUMERS (like a Lion) and not GREAT PRODUCERS (like trees) which the world wants.

If you don't want so, develop digital robots that do surplus production everywhere to reduce prices globally.