I helped myself to Kurt Acord's US News while waiting in the teacher's lounge for the class bell to empty the cafeteria. I thumbed through his magaize and found the cartoon accompanying this blog. As the price of a good increases, the demand for its substitute increases as shown in the cartoon. Also, as postage increases, alternatives become more attractive and profitable so rivals will enter the market. Our text messagers to the right, are acting economically too. The marginal cost of sending a TXT is zero, so they will consume up to the point where price equals zero. Kids will continue to textmessage until the benefit equals the cost. Do you think technology is breaking down some the monopoly barriers to entry that the US Postal service has enjoyed? Thanks Kurt for suppling this every day example of 101 economics. The cartoon is a work of Marshall Ramsey/Copley News Service/The Clarion Ledger and appeared in the May 28, 2007, page 20, U.S. News & World Report.
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