Learn some economics, be entertained… (part III)

YouNotSneaky’s at it again. Why might prices be more stable under monopolies (and why might we care)?

Here’s my favorite line:

Probably less explicitly but more importantly, when prices keep changing on you it means you’ve gotta recalculate your optimal allocations of expenditure again. You gotta set up a new Lagrangian, take the damn first order conditions and figure out if making out the adjustments in your optimal consumption basket – given your income – are worth it. What? You don’t think that way? You don’t set up constrained Lagrangians every time there’s a change in prices and compute your Kuhn-Tucker conditions?

4 thoughts on “Learn some economics, be entertained… (part III)”

  1. S’kind of like when dogs do differential calculus to figure out the optimal path to a stick thrown into a pond.

  2. Yeah… I remembered the article, but I’ve never read the book.

    Ever since, I’ve thought of those “gut” calculations as “dog math.” Really fun when you get into arguments with your mathematician friends over how much trig a basketball player needs to know.

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