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March 29th, 2012 Praveen Bose

The Friendly man at Friendly ice cream is happier with his business today than he was about a month ago. The outlet better known for its softy ice creams, has seen the business from softy doubling since the last time he hiked the price of the ice cream!

A student of Economics would perhaps be left befuddled. But, the Friendly man, who’s run the business for over 25 years, has a clientele who more often are from the cream of the society. The cream, not just in terms of money, but also in terms of intellect, actually are not so price sensitive.

He counts a school in the neighbourhood being a captive source of clientele. But, the students do not favour the softy. It’s too cheap for the students who many a time come with a Rs 500 note.

But, the grown-ups who come to him for ice cream don’t seem price sensitive in any way. Perhaps it is now not necessary for the buyer to have the right change. Earlier it cost Rs 18 and now it costs Rs 20. Perhaps, there’s some economic formula to measure the elasticity of demand of the product.

So, now he’s been advised to keep the price of his ice creams as a rounded figure and not ones that would require one to fish out Rs 2 or Rs 3 coins.

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