Eric Rasmusen's Weblog: The Just Price

Saturday, December 19, 2009

The Just Price

Suppose I am the only person who can sell a widget to John Doe. It costs me $10 to sell it to him, including the cost of my time and a standard profit rate. He would pay up to $30 for it, if he had to. What price am I justified in charging, if I can make a take-it-or-leave-it offer?

Note that I am leaving John Doe better off than if he never met me even if I charge him $29.

Labels: ethics, price theory, religion

To view the post on a separate page, click: at 12/19/2009 03:56:00 PM (the permalink).

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I've set up this blog for myself, as a commonplace book, with the idea that it might also be useful for outside readers. That is why the topics are idiosyncratic. I see that most of my readers are directed here by Google searching rather than being regular readers.

I will delete rude comments, and will give less leeway to anonymous comments than to signed ones. I will for now at least allow stupid and ill-informed comments, though other readers don't enjoy them unless they are so ignorant as to be funny.

I will revise my posts freely, usually without any note that they've been revised. If I make an important mistake in a post that I think people might refer to, I will note the mistake and correction. But I'm not trying to make this a historical record. In fact, I'd like to merge posts on the same topic and delete posts not of interest a year later, except that I never get round to doing that.

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Eric Rasmusen's Weblog

Saturday, December 19, 2009

The Just Price

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