Wednesday, January 16, 2008

Note on windfall profits

The next time I hear someone talking about the evils of price-gouging, or how such-and-such industry should be subjected to a windfall profits tax, I hope I can remember this story from Jim Reed's The Funny Side of Fishing:

Customer: "How much is that fly rod in the window?"
Store clerk: "$150."
Customer: "Wow! The discount store at the edge of town sells that same rod for $75."
Store clerk: "Why don't you buy it there?"
Customer: "Because they're out of them."
Store clerk: "Oh, when we are out of the rods we sell them for $50."
Supply and demand. That's all.

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