Wednesday, January 16, 2008

Marginal Price

The market price for any good or service is determinied at the margin. Only the marginal purchaser pays the maximum price they are willing to pay for it. That means that most people are able to purchase the goods they want for a lower price than they would be willing to pay for them. Likewise most producers are able to sell the goods they produce for a price that is higher than the minimum they are willing to accept. That should make us all feel good.

No comments: