Let’s say that a certain product is valued at .01 cents. If you want 1.5 (1 and ½) of that product you must either pay .01 cents or .02 cents due to the fact that a penny is the smallest denomination in existence.
Let’s revisit the same product under the rubric of a commodity based money. Let’s accept that the product is now valued at .001 grams of the commodity money and you still desire 1.5 (1 and ½) of that product. You may now opt to purchase a quantity of 1.5 by paying .0015 (.001 x 1.5) of the commodity.
Why wouldn’t the market create a .001 cent denomination and solve the problem? If a product of significant value is not being served by a denomination of money, why wouldn’t the market address this? If under a fiat system, why wouldn’t the government overseers simply create a .001 denomination? What’s stopping them?
What business/individual is selling something for less than one cent? Seems very unproductive, and if they are actually producing something they must be taking on losses.
EDIT: Misread it. “Let’s say that a certain product is valued at .01 cents. If you want 1.5 (1 and ½) of that product you must either pay .01 cents or .02 cents…”. There must be an agreement with the seller, what if he doesn’t want to sell a half of his product? Maybe he just sell’s whole products, or maybe you can bargain with him? It’s like taking someone elses pricing system and scrutinizing it under what you see as valuable. Whatever prices are set are the correct prices.
It is a good question, I would say most anyone who sells things is benefiting, because they are probably more aware of it, and thus are willing to offset prices towards that end (because they can see the difference in their paycheck), I would think that consumers have a harder time intuitively seeing the affects of it.