The Orange Path

How Much is the Laptop?

by Robert Frank
New York Times, 6th July 2006

an excellent and clear explanation of how price discrimination best serves consumers. Mr. Frank is an economist at Cornell. One of his headlines says: "If price discrimination seems wrong, try taking another look

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Economics of Prices

By Walter E. Williams
Human Events Online, 30th May 2006

Say you owned a small 10-pound inventory of coffee that you purchased for $3 a pound. Each week you'd sell me a pound for $3.25. Suppose a freeze in Brazil destroyed half of its coffee crop, causing the world price of coffee to immediately rise to $5 a pound. You still have coffee that you purchased before the jump in prices. When I stop by to buy another pound of coffee from you, how much will you charge me? I'm betting that you're going to charge me at least $5 a pound. Why? Because that's today's cost to replace your inventory.

Historical costs do not determine prices; what economists call opportunity costs do.

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The Three Roles of the Market

By Frederic Sautet
Dec 2005

In my view, the market’s three main roles are:
* A knowledge discovery process via entrepreneurial competition;
* A feedback process via the profit and loss system; and
* The result of the first two leads to an accountability role providing governance.

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