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Economics Of A Candle

Popularity 3Viewed 1430 times 2015-12-5 22:23 |Personal category:economics|System category:Economy| economics

I don’t remember last time when electricity is off. Now people don’t think preparing some candles is necessary in case something has happened. Nearby my apartment, recently civic government is building subway. Without any notice at 6 pm one day, for some reason, some government staff cut off electricity, then brought a deep dark field.

 

Nobody thought it would last long until two hours had passed, suddenly I and my wife realized we should buy a few candles, in order to pass the endless night. A worse thing happened after we walked out, that we can’t buy candles nearby because all stocks were out. So we must find some distant blocks, finally we found a little grocery had some. But it had already cost us half an hour. Candles were not expensive, one candle worth only 1 yuan. We decided to buy all of the stock, that’s only 10 candles.

 

On the way back home, I told my wife, the owner of the grocery should make the price up, at least 5 yuan per candle. My wife replied sarcastically, “It is lucky you are not the owner, or you would be a profiteer, without any morality.”

 

I would say if the price goes up, it is going to bring the most utility. Why? It depends on how we evaluate a decision. How much does it benefit the whole society? Economics researches which decision brings the most utility to society.

 

Follow this way: You have bought 10 candles, but you just get utility from one or two, according to normally account. Because out of electricity mostly lasts one night, if adding the sleep time, you even can’t utilize the two candles totally. In other words, you spend 10 yuan, but just enjoy only half a candle. Because you have bought all the stocks, which causes others have no candle to buy. They must stay in the dark to tolerate the endless dark. The conclusion is you spend 10 yuan to enjoy the light of half a candle, but deprive at most 9 people’s light. We have lost much more utility in the whole society.

 

On the contrary, if the owner increase the price, for example, 5 yuan per candle. I know there is only one night out of electricity, one candle is adequate, plus I think the price is a little expensive, the probability is I would just buy one candle. So I spend 5 yuan to enjoy the utility of half an candle, and other 9 people have a chance to enjoy the light from candle to expel the endless dark. From the aspect of whole society, we get the most utility.  

(Opinions of the writer in this blog don't represent those of China Daily.)


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Reply Report Dr.Bill.Shen 2015-12-6 11:14
The price is ultimately decided by supply and demand. Unexpected change in balance between the two would cause price fluctuate. If the inbalance ibecomes quite systematic, the manufacturers of candles and their raw material providers will hike the price accordingly. It is a genuine chain reaction, there will be no money left on table.
Reply Report voice_cd 2015-12-7 11:13
Thanks for sharing your story here, we have highlighted it in our blog homepage.
Reply Report Dracarys 2015-12-9 10:25
every time when something in our memory disappeared we would be sad and might blame this fast-developing world . but think carefully it's also good .. take candle .when I was a child because of frequent power off so our parents always buy dozens of candle in prepared . but now as our life situation is getting better there are little or seldom power off happened .So we really don't need candle as we used to . it's good

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  • Economics Of A Candle 2015-12-9 10:25

    every time when something in our memory disappeared we would be sad and might blame this fast-developing world . but think carefully it's also good .. take candle .when I was a child because of frequent power off so our parents always buy dozens of candle in prepared . but now as our life situation is getting better there are little or seldom power off happened .So we really don't need candle as we used to . it's good

  • Economics Of A Candle 2015-12-7 11:13

    Thanks for sharing your story here, we have highlighted it in our blog homepage.

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