Quote:
Originally Posted by Miscguy
Supply and demand. People are stupid this time of year and will stupidly pay absurd prices for things.
|
technically, technically! it is not them being stupid. Those consumers who buy them at an elevated price simply have a higher WTP (willingness to pay), their preferences don't change at all. This is illustrated by studying any downward sloping demand curve, nomatter where the price is, those people who have that exact WTP or higher will buy it. If the price is $300, yet consumer A has a WTP of $400, he can still buy at $300 and we call that extra $100 he saves consumer surplus.