My son is an aspiring little economist. At the age of two, he already understands the Law of Supply and Demand. Let me give you an example.
Dom recognizes that he provides a very specialized service to his Mommy and Daddy: eating his broccoli. In fact, there are no other competitors in the market. Only Dominic can eat Dominic’s broccoli, and it’s clearly apparent to him that Mommy and Daddy have an almost limitless demand for his services (point Qd on the above graph).
Dom on the other-hand, hates eating his broccoli, making the supply of this valuable service extremely scarce (point Qs). Without sitting in on even a single economics class, Dominic understands that he has a corner on the Dominic broccoli eating market, and that he can charge virtually whatever he wants because of his monopoly. Because of the excess demand (Qd - Qs), the Price (P) of eating his broccoli moves well past equilibrium to the point on the demand curve that corresponds to Qs.
So what’s Dominic’s currency of choice, you ask? The fact that he almost choked himself on a quarter yesterday proves that he doesn’t understand the value of American currency. However, he is quickly becoming a scholar of the barter system. Here’s how the invisible hand of capitalism shook out during tonight’s dinner:
Me: “Dominic, eat your broccoli.”
Dom: “cookie?!?”
Me: “Okay kid, you’re cute, I’ll play along. Eat your broccoli and I’ll give you a cookie.”
Dom: tears a piece of broccoli in half and take a small bite.
Me: “that wasn’t enough; eat some more if you want a cookie.”
Dom: whine whine whine (did I mention that he also understands negative reinforcement?)
Me (lying): “I’ll sit here all day, kiddo.”
Dom: eats the other half of a half of piece of broccoli, picks up his plate and hands it to me, adding “on don” (“all done” in Dom speak) for good measure.
Me: totally recognizing that my bluff was called, I get up sheepishly and grab a mini vanilla wafer.
For the record, I did save some face by making him say “please” before surrendering the cookie. I know, I know. You think Dom won, but you’re wrong. Capitalism won.
Tagged with: supply and demand • vanilla wafer