Thursday, September 29, 2011
一分钱, 一分货.
this cliche doesnt really hold water for economist i guess.
a good is worth as much as what the consumer is willing to pay.
producer will always seek to extract every cents of what the consumer is willing to pay,
that is why there is price discriminate every where.
in economics,
that is call consumer surplus,
producer wants to convert as much of consumer surplus as possible into their earnings.
that is why paying more doesn't necessary mean that you are getting better stuffs.
.: