Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public PolicyClark, John Bates
General
Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public Policy
Clark, John Bates
Economics
_The Function of a Special Class of Marginal Purchasers of Each
Article._--In like manner there is a class of "marginal purchasers" of
the article B, or the persons who pay for it so much that they get no
net benefit or consumers' surplus from the purchase. If they did not
buy this article, they could get something else that would do them as
much good for the same outlay. It costs, let us say, only ten dollars
in the making, and enough of these articles are made and offered for
sale at that price to supply all customers who are attracted by the
offer. The men who would pay more for it do not count. Each of the
other articles in the bundle, when it is offered separately and at the
cost price which competition establishes, represents a final utility
to some one class of purchasers. Competition has made the whole supply
so large that, in order to dispose of it, venders must attract the
particular class who will take it at the ten-dollar rate. This class
is in the strategic position of market-price makers for this one
thing. They are the last class to whom the producers can afford to
cater. If each of the five articles in the bundle costs the makers ten
dollars, and if so many of each are made that they just supply the
needs of the classes that will buy them at ten dollars apiece, the
price of all five, when sold separately, will be fifty dollars. Most
of the purchasers of each article would give more than ten for it if
they had to, but some would not do so, and the producers cater to the
needs of these marginal persons.
Public-domain text, read in full here on John Shaqi.
Reviews
Reviews
No reviews yet
Be the first to share your thoughts on this work.
Elsewhere in the archive
Join the Discussion
Join the discussion
Sign in to leave a comment or review.
Sign InorCreate an account