A stockbroker walks past a kid selling lemonade
“Hey mister, ya want some lemonade?” a little girl calls to him. The stockbroker is just getting out of his brand new BMW in a nice tailored suit. He was about to walk past when he a double take at the sign that says “Lemonade $50”.
“Your sign is wrong kid. I think you mean fifty cents.”
The little girl shakes her head. “Nope, fifty bucks mister.
I need the money for Space Camp!”
The stockbroker pause for a minute, because he appreciates a good hustle but clearly this kid is going about it the wrong way. “Look sweetie, I know you’re trying to make money but you have to charge what people are willing to pay. No one is going to pay that much for a tiny cup of lemonade.
Now what do you think is a fair price?”
The little girl beams and says “Fifty bucks mister!”
The stockbroker gives a little sigh and shakes his head. “Okay I’m gonna pass. You see?
You can’t make a profit when no one pay your price. Now do you have anything else for sale?”
“Homemade brownies, 50 cents!”
The stockbroker winces in frustration. “OK look, I studied economics at Harvard and I got my MBA from Wharton so I’m going to teach you a little about business, okay?
Now each of your little cups of lemonade probably costs you about fifty cents including the margin cost of your stand.” He takes out a dollar. “I’ll pay you ten times that much because I want to help you understand about markup.”
The little girl shakes her head and smiles. “No thanks, mister.
What happened next changed everything… FULL STORY on the next page.
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