Design

Freakonomics » Scooby-Doo Arbitrage

On exploiting a non-competitive niche market.

A student writes that she understood arbitrage at age seven. She brought Scooby-Doo Fruity Snacks from her grandmother’s house (no charge to my student) to her Vacation Bible School class. She was a monopolist in the class—nobody else brought snacks; and since the demand was quite inelastic, she was able to sell her Fruity Snacks for a good price. Regrettably, her business was shut down because, as the teacher said, she was engaging in “uncharitable exploitation of [her] peers.” She was also invited not to return to Bible School, showing that clever economic behavior may only pay monetarily. (HT: CAP)

via freakonomics

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