Tuesday, September 21, 2004
people are willing to pay more regardless of whatever it is, as long as it as unique and exclusive
innit the same with friends?
if a person is excludable, then there's a market price for him/her. = to be treated more imptly than others, since u have paid a price for the friendship n the benefits shld only be enjoyed by a person.
if a person is a public good ie non-rival and non-excludable, then the benefits of the frenship can be shared mutually by all and even if there's one more person sharing it, the benefits shared by the others wldnt decrease. but hence at the same time, no market price could be placed since it's impossible to prevent those who have not "paid" from benefiting, there wld arise the problem of free-riders. therefore, since P=MC=O, no price can be placed.
which comes to the point. which one is better?
 
posted by mian at 9:55 PM | Permalink |