OK, I am a business major and an avid shooter, I've taken a lot of economics classes and so this thread is putting those concepts to the ammo industry. First, the ammo industry is highly competitive. Meaning that the manufactures of ammo cannot set a price. There is very little if any price setting ability in a nearly perfect competitive market such as the ammo industry, since its easy for a new firm to move in and produce ammunition. The barriers to entry are not many. Second, in a situation we find ourselves in today, we see that demand outweighs supply. In this scenario, one should see companies in the short-run make abnormal profits, but old companies should increase their output at some point and new firms should move in to increase supply. On the reverse side of that, if there was less demand, we would see firms move out of the market and supply dwindle. In the short term it makes sense to see what we are seeing with ammo, but not in the long run. Why is it then, that this shortage has continued for so long? There are many explanations that could render this scenario. I do not have the answers but am putting those possibilities out there: 1: The resources could be in short supply. How easy is it to obtain brass? Are there substitutes which are cheaper and more easily available? remember we still have 2 wars going on and probably a third with Iran, so expect those resources to continue to diminish. Also, it is hard for a mining firm to extract more ore. It takes on average 10 years for one mine to increase its output, due to constraints such as specialized equipment, personal, and cost benefit analysis. So to say, the mining companies don't have a real incentive to increase production due to the fact that their resources are limited and they want to sell each OZ at the highest price possible. 2. Collusive agreements may be possible if there are bottlenecks in the chain of distribution. This goes to the whole sellers that supply stores such as Bi-mart and Wally World, but it does not mean and I would seriously doubt that the retail outlets have anything to do with it, since there prices per box do not change. So where do we see prices change? At the FFL. The barriers to being a licensed FFL are many. It is costly to get licensed and open a gun shop. If to say the FFL where to collude and work with the suppliers it would be easy to take the ammo from wally world and Bi-mart and constrain supply artificially and start to set prices. Remember for ammo there should be no price setting ability if the market is running uncorrupted. 3. New companies coming into the market may be hard pressed to do so in an economic downturn. First, is there an economic benefit to starting an ammunition company? Could those potential firms do something else and make more profit? Who knows? I don't, but there is a thing called capital structure that companies must abide by. Capital structure is the amount of debt compared to the amount of equity in a company. And to say, right now capital is hard to come by in the form of business loans, and there is no way what so ever that any company at this point in time could assure a bank that its cash flows and capital structure will stabilize after x amount of time once it has started up operation. Also, banks may not have the better opportunities and give money to other industries. These are just a few examples that are possible. there are more, but before making any one digest anymore of my talk, how about some replies.