Elasticity of Desire
When I was a kid, maybe 9 or 10, I would buy a pack of candy for about P30.00, take it home, and sell them for P20.00 each to my younger brother. I used to wonder why he always bought them – even though he knew how much the whole pack cost (on other grocery trips he’d buy his own pack and still buy my pack at crazy prices). The few times he didn’t buy them was when he didn’t have any money, and even on those occasions, he was ready to borrow from his brother Shylock (my earliest experience of the world of money lending).
Fast-forward to my university days studying Economics. We’re talking about the price elasticity of demand.
One thing I never understood when I was younger, was that no matter how much I cheated my brother on the price, and no matter how much money I made at his expense, he never seemed to care. He was happy with his candy.