A SIMPLE MATHEMATICAL ECONOMICS DEMONSTRATION.

It's on Twitchy, and the poster is better known in social media circles for his extensive knowledge of vintage automobiles.  Enjoy it all the same.  "Iowahawk has put together a handy thread on economics ‘in the interest of making this place just a weeee bit less f*cking stupid’"

Here's the setup:

Now being a filthy profit hoarding Taco baron, I wish to maximize those profits by (1) taking the 1st derivative, setting to 0, and solving for the price that will maximize profits.

1st derivative of profit = (A-BC) + 2*BP = 0

profit max price = P* = (BC-A) / 2B

I'll excuse him that "setting to zero." (It's "finding the critical value.")  But it's standard locution in mathematical economics, and for full credit he should note that the profit expression is globally concave since B < 0, but it's Twitchy, it's summer, and I'm retired.

For the values of A, B, C, and P that he eventually imposes, P* = 6.  Then comes the key takeaway.

Screw that, though! I want my customers to suffer both gastronomically AND economically, so Imma jack that taco price up to $7!

At which price I will sell 30 tacos, make $5 per taco, for a total profit of... $150. WTF?

Blimey this taco price gouging is complicated

Of course it is, which is why elected officials always get it wrong.

Are you hungry, dear reader?