4 ms·
Expensive is relative. If there is an alternative good of cheaper price, then the original good is expensive. For instance, if a grocer charges $0.10 per plast
by ppeetteerr 4y ago
Expensive is relative. If there is an alternative good of cheaper price, then the original good is expensive.
For instance, if a grocer charges $0.10 per plastic bag to the consumer, but $0 to the consumer for paper bags, the consumer is likely to consume the paper bag. That extra $0.10 can then be used to lower the cost of other things because the company's profits are slightly higher. The rebate to the consumer from those paying for plastic is negligible because it's not perceived to be in direct relation to the immediate purchase (the cheaper cost of the paper bag is, however).
What does the consumer do with the extra money? They consume more of the cheaper product which is hopefully more environmentally sustainable.