The price (that consumers are willing to pay) is the only decent proxy for quality we have. Quality, of course, includes consumers’ preferences.
If the one car sells at a market price of 1/5 of another, then the only reasonable conclusion is that, as judged by consumers, one car is worth 5x as much as the other, and therefore is 5x better.
That’s what market prices are: the collective valuation of goods/services and their alternatives. Of course, the market clears at a price that is a combination (you can think of “average”, but that arithmetic is not the process by which prices are discovered) of the preferences of all consumers in the market.
If you have a preference that goes counter to the market, e.g., if you do not think those two cars are 5x different in quality, then there is a great deal for you!
If you think the worse car is only 2/5 the quality (rather than 1/5), then you can get something for half the price you’d be willing to pay if the rest of the market agreed with your preference.
If, on the other hand, you think the better car is 10x the quality of the worse car, then the same “deal” is true for you. You’d be willing to pay 10x the cost, but you only have to pay 5x the cost.
There are plenty of good macro and micro econ courses available for free if you’d like to dig into this sort of thing more.
If that was true USA would export its industry produces, but the rest of the world mostly don't want what USA makes, meaning it isn't actually worth that much.
If the one car sells at a market price of 1/5 of another, then the only reasonable conclusion is that, as judged by consumers, one car is worth 5x as much as the other, and therefore is 5x better.
That’s what market prices are: the collective valuation of goods/services and their alternatives. Of course, the market clears at a price that is a combination (you can think of “average”, but that arithmetic is not the process by which prices are discovered) of the preferences of all consumers in the market.
If you have a preference that goes counter to the market, e.g., if you do not think those two cars are 5x different in quality, then there is a great deal for you!
If you think the worse car is only 2/5 the quality (rather than 1/5), then you can get something for half the price you’d be willing to pay if the rest of the market agreed with your preference.
If, on the other hand, you think the better car is 10x the quality of the worse car, then the same “deal” is true for you. You’d be willing to pay 10x the cost, but you only have to pay 5x the cost.
There are plenty of good macro and micro econ courses available for free if you’d like to dig into this sort of thing more.