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