Does that mean that you don't think that Moveon should have paid the top price, either?

I actually will defend MoveOn, in a way. They *shouldn't* have to pay the difference, but they are voluntarily offering to pay it. There is a big distinction here.

By its own rules, the NYT should *not* have offered the price, but it nonetheless did, and MoveOn accepted the offered price. The transaction fulfills all five requirements of a valid contract, including "a meeting of the minds." Just because the NYT personnel involved didn't know they should have charged more, that does not mean there wasn't "a meeting of the minds." A seller cannot revoke a transaction later on just because he realizes he should have charged more.

I hope Giuliani stands firm and doesn't pay the difference. He's not obligated to, and besides, it's just a Democratic ploy. If Giuliani hadn't gotten the same rate, MoveOn would have said, "Tough cookies, we're not paying the difference."

Sooooo, they'll pay the market rate when they get caught, then it all goes away? I hope not.

Eric, I feel like the alternative might be they don't pay the market rate and it goes away anyway.

I always thought that basic rules of supply and demand meant that if anyone uses a lot of ad space in a publication, they could reasonably expect a rate. If I print off 5 photographs, I pay 20pence a shot. With 50 I pay 10p a shot, and with 500 it's 3p a shot. Perhaps I'm too far away from this to see the big deal. Help appreciated.

Not quite, bryan. Different markets have different rates, and different fluxes of supply and demand curves. Also, the economies of scale between photographs and full-page newspaper ads are quite different.

MoveOn received a "standby" rate, which is a cheaper rate given when the newspaper tries to fill in the last empty spaces. It's like a store selling those last few "clearance" items at deeply discounted prices, or, as you may have guessed, the cheap "standby" fares that airlines charge so they can fill up those last few seats.

It's an early economics lesson that "Decisions are made at the margin, not the average." Sellers don't consider the average cost, but the marginal cost of producing one more unit. That's why an airline can sell a standby ticket for, say, $200 and still make a profit, when they need to average, say, $500 per seat. Most of the time, there's a "sunk cost" before you produce the first unit. That's why printing 5 photographs is very expensive *per photo*, compared to the per-photo cost of 500 photographs.

But, the NYT wasn't yet down to selling those last few advertising spaces (at cheaper prices so they could fill them up). There was still plenty of advertising space, and plenty of willing advertisers, that the "standby" price shouldn't have been given that early. But what do you expect when you have a few liberal executives with clear bias?

Perry, for once you have IMO nailed what I wasn't getting. Thank you.
I suppose my comparison is a bit simplistic, but I've always noticed you save more if you buy more. The NYT were giving a preferencial rate then. They must agree with what moveon are trying to do. Don't people who disagree get a rate at papers sympathetic to them?

It's just basic economics, bryan. Don't worry, I will continue...educating you.

You save more by buying bulk, usually, because it reduces overhead costs. A 1.5L bottle of vodka doesn't use double the glass that a 750 mL bottle requires, which means the manufacturer spends less to profit off the same volume, and retailers sell 1.5L with less cashiering effort and shelf space than two 750s.

I actually believe it's the NYT's right to sell ad space at whatever rate to whoever they want. It's also our right to call them on their hypocrisy, and to point out that they violated their own stated policy.

ok, fair enough.