Why do you go to chruch? I'm sure there are many reasons, but while attending the Cornerstone Baptist Church in Ames last weekend, I reasoned that many attend church to learn about the teachings of Christ. For example, this week the congregation is learning about "The Sermon on the Mount (Matthew 6:1-4)." I reasoned that many attend church to obtain the information about faith. I noticed as the members of the church bought coffee and cookies, music CDs, and books. Do churches try to maximize profits? If so, then the pulpit model resembles an information model that presents some interesting problems for the church.
The church model that I would draw is characterized by high fixed costs and low marginal costs and a downward sloping demand curve. As the graph shows, the church would maximize profits at point 1 and charge a price of P1. This is interesting to me since I believe that a church's goal should be to save as many souls as possible which occur at point 2.
How could a church charge a price? The church could require an offering at each service, require members to attend classes after church, evangelize, minister, perform on stage, work in the kitchen, and distribute dogma. Since the church is a fixed supply in the short-run but the Word is perfectly elastic, the church models an artifically scare good and the church can maximize profits at point 1, where MB = MC.
My observation is that an information good is bundled to add value. Thus, coffee and amenities are offered at a low opportunity cost. Wikipedia writes, "That is the strategy of grouping multiple items together and selling them as a group. Bundling allows sellers to better predict the demand for the bundle. While it is difficult to know which items in the group an individual person wants, they are likely to value some of the items enough to purchase the bundle, even if they don't value any of the items enough to buy it separately. However, this only works when it doesn't cost much to sell extra items in a bundle that are unwanted. Information goods fit this profile since it doesn't cost anything to make extra copies.That is the strategy of grouping multiple items together and selling them as a group."
Many atheists point out that the Bible is full of contradictions. Perhaps it is a sad irony that the economics of the church are also contradictory. In this blog, I have only presented one side of the argument contrary to John Stuart Mill admonition. I welcome discussion.