Saturday, October 1, 2011

Supply and Demand in the Jimeta Market

In defining demand curves and supply curves both for my principles and intermediate microeconomics students, the phrase I have consistently used goes something like this: You tell me what the price is, I will tell you how much I demand/supply. That's just the way I think about it. I go to a store or a merchant, ask the price, and decide how much I am willing to buy at that price. You make me a wage offer, I decide roughly how much to work.

Now we haggle over price and I still have the same model in mind: we agree on a price, and then I decide how much to buy. If the price is high, I will buy less from you than if the price we agree on is low. I had a very unfortunate debate on this with a broiler chicken merchant a few weeks ago. We settled on a price and I told him I wanted 7 chickens. His English wasn't very good and thought I was haggling to get the price down another 400 Naira. Anyway, I was only allowed to purchase one, which greatly confused me.

The Lovely and Gracious, however, has a different strategy that is proving to be much more effective. Thankfully, because I've been snowed under in grading work, she's the one who's been doing the shopping. She and the merchant start haggling over price, then she tells them just how much she wants to buy. Impressed by learning we are willing to buy more than one, they are then willing to lower the price a little more, saying with a smile, "You will come and buy all your _____ from me, yes?" The meat guy, the green bean guy, the banana guy, they're all getting to know her lovely (and gracious) face, and to give better prices for regular customers.

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