If you have to ask the price ...

A shop with only a few goods, Moa, Cuba

Then you cannot afford it. I quoted it liberally from Kevin O'Leary, one of five multi-millionaire investors from the Canadian Broadcasting Corporation (CBC) investment reality television program, Dragon's Den. He went shopping for 5 Hermes ties which, according to him, are beautiful and brightly perfect for TV.

He asked for a 12% discount when buying those 5 ties. Instead of getting a bargain, the sales lady told him he could just buy one. Replying that he had a purchasing volume on his side, the lady answered by suggesting him to buy one tie each for the next 5 months. Insisting further that it would be unusual to have someone buying 5 ties at once, the lady answered by saying those ties would eventually be purchased by someone. Thus, if you have to ask the price, you cannot afford it.

There are two lessons from this story. First, buy less, buy better. Or, corollarily, as my friend put it, if you have to ask how to use it, you do not need it. Look around our house and room, and you know what I mean. We bought crappy (not necessarily really cheap) stuff because (a) at that time you thought you needed it and (b) simultaneously you had believed you had won the haggling battle - without any war - when knowing the price was lower than you expect since it was on sale.

This story may be too late for your Boxing Day shopping glut, but hey there is always next year. So long as you remember this story.

Second lesson is academic. I am always interested in figuring out equilibrium prices of stuff we buy. In fact I asked this question in my Statistical Thermodynamics course exam to my graduate students. An equilibrium price is analogous to chemical potential of a physical system. (Note: chemical potential has a specific meaning in thermodynamics.) The good or service gets transferred from a seller to a buyer and the cost is equal to the change of the asset of either party as a function of number of that item.