How to Feel Profoundly Grateful about the Market

In the real world, prices often seem far above marginal cost. Yesterday, for example, I bought a pair of tweezers for $14.99. But it’s hard to see how the marginal cost – metal, electricity, transportation, miscellaneous – could even reach $1.00. That’s a markup well in excess of 1000%. If you’re steeped in the perfectly competitive model, where price always equals marginal cost, it’s easy to feel “ripped off” whenever you make a purchase.