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Wednesday, November 20, 2013

learning economic theory corn dog style

Recently, at the Lone Star Biker Rally in Galveston, Texas, I had a sort of epiphany involving corn dogs. 
Wandering among the mobile vendors lining the side streets of the historic downtown area, as bikers from all over the country roared down the main drag, I set off in search of a jumbo corn dog. I went up to the first stand I saw but they were sold out. Disappointed, I made my way down the block and found the next stand—sold out too. But across the street I finally found another stand that had them—for $5.50 apiece. It also had a long, barely moving line, so I had time to stand there and think. 
My first impression was that the price seemed too high—I could see people calling it a rip-off or gouging, and moving on. Although I don't know the corn dog’s bottom-line cost of the corn meal, weenie, frying oil, and wooden stick, I’d estimate that corn dogs cost around $1 to make—probably even less when bought in bulk. There's clearly a high markup. Maybe I could conclude I was being exploited. Admittedly, I wasn't thrilled to pay that much, but there I was standing in line. 


Read more: http://www.fee.org/the_freeman/detail/the-economics-of-the-corndog#ixzz2lBw3ygOB