Economics Stack Exchange Archive

A specific term for a product/service that generates more money than it’s sale price?

For example, if I purchase a book for £10, read it and then sell it for £5 is there some economic term/rule that describes the fact that the item has generated £15 rather than the original £10 sale price?

Answer 1322

I think you're looking for the intersection of durable and nonrival goods. Another way of looking at this issue might be as a kind of club good.

One could argue that this dynamic is already captured in the price since buyers are forward looking and take the option value into account. Here's a neat paper by Judith Chevalier and Austan Goolsbee looking at how the demand for college textbooks is impacted by new editions.


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