Dear Economist

Selling Prophecies

There is a legend about the last king of the Romans, Tarquin. An old witch came to Tarquin, and offered to sell him nine books of prophecy at an exorbitant price. Tarquin laughed at the offer. The witch burned three of the books, and then offered to sell him the remaining six for the original price. Tarquin refused again.

The witch burned three more books and offered to sell Tarquin the three books that were left for the original price that she had demanded for nine. This time Tarquin was scared that he might be losing something precious, and bought the remaining three books for the price that the witch asked. What sort of demand curve is that?

Chris McMahon, by e-mail

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5th of May, 2007Dear Economist • Comments off