Abstract
This paper proves mathematically in a defined model with restrictive assumptions that consumers are better off when they have more food for the Sabbath at the expense of having less food for the other six days of the week! Like the manna that fell from heaven for forty years in the desert—an omer to a person, Sunday through Friday with double portions on Friday—we assume that consumers buy standardized semi-perishable food baskets, one basket per person per day, Sunday through Friday with extra baskets for the Sabbath. We analyze benefits to consumers according to two alternative pricing schemes, whereby consumer expenditures and weekly food consumed are the same. We prove that consumers are better off according to the pricing scheme that allows for more food for the Sabbath day. This agrees with business cycle theories that urge social focus on increasing and prolonging cyclical peaks. This supports John M. Clark’s workable competition thesis and will surprise supporters of SR marginal-cost pricing.
Highlights
In economics we work with societal models to better predict and advise on production, consumption, investing, financing and government regulation
We prove that consumers having fluctuating downwardsloping linear-demand curves, Sabbath versus Weekday, with the Sabbath demand curve to the right of the Weekday demand curve, a pricing scheme that leads to consumers buying less food on Weekdays and more on the Sabbath, will increase consumer surplus
We demonstrate here that a rigid price in high and low demand periods for a perishable product generates more consumer surplus where consumers pay the same anticipated payments and receive the same anticipated goods over the cycle
Summary
In economics we work with societal models to better predict and advise on production, consumption, investing, financing and government regulation. We define concepts from economics for non-economists to understand. We developed the thesis of this paper from the work of the economist John M. Using Clark’s theories, we argued elsewhere that, despite high levels of idle capacity, cement capacity in the 1930’s was inadequate, when measuring adequacy of capacity against anticipated peak demand [2]. We learn from this that satisfying peak demand should always be the uppermost consideration, whether business-cycle peaks, seasonal peaks, or Sabbath-day demand
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