... costs by the time the harvest is ready, so in the short term and except for the cost of harvest, in the conventional price theory its more the marginal willingness to pay.

And of course in the long term the price theory elements are only one part of a set of determinants including habitual behavior and technological change, both of which are beyond the scope of the conventional price theory.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

Only if the seller has perfect information on buyer behaviour. If the seller believes that there will be no more purchases after purchase # 2, then the marginal cost of producing orange # 3 is irrelevant. (And all of this assumes that the market is competitive, coherent and reasonably homogeneous, all of which are highly non-trivial assumptions...)

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.