Economics · Level 1 · 184 words
Why the Big Box Costs Less
Original passage © Studio AM, written for Fluency.
Two boxes of the same rice sit on the shelf. The small one holds one kilogram and costs three dollars. The large one holds five kilograms and costs twelve dollars. The large box has a bigger number on the price tag, yet it is the cheaper rice. One kilogram costs three dollars in the small box and two dollars and forty cents in the large one.
The reason is that some costs do not grow with size. The box itself, the printing, the label, the space on the truck, the moment a worker spends handling it: these change very little between one kilogram and five. Spread the same fixed cost over more rice and the cost of each kilogram falls.
This is why shops print a price per kilogram in small letters under the tag. It is the only number that lets you compare. But a lower unit price is a saving only if you use it all. Buy five kilograms, eat one, and throw four away, and you paid twelve dollars for one kilogram. That is the most expensive rice in the shop.
Source: Written for Fluency. Original passage © Studio AM, written for Fluency.