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Pastimes : Austrian Economics, a lens on everyday reality
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To: TimF who wrote (208)4/28/2003 12:36:40 PM
From: Don Lloyd   of 445
 
Tim,

Both the curve and the actual level of utility for each additional paper would vary by individual, but it is was not true that for most individuals the additional utility was very low then papers wouldn't be sold that way.

Another factor would be that most of the papers put in the machine are likely to be purchased relatively early in the day, so little is at risk on a time-averaged basis.

Also, the newspaper company itself draws its benefit from advertising and audited circulation. The advertisers don't really care if the papers are paid for or not, if they have the prospect of their ads being read. Consider it as a form of price discrimination, where two tiered pricing can exist in a stable form and serve both paid and free customers.

Regards, Don
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