The mare dropped to the ground with sickening speed.

“Rarity!” Twilight screamed even as she cast her magic forward.

And Rarity screamed, “And never come back, do you hear me? Never!”

Twilight's heart caught in her throat as the glow of her magic surrounded the shrieking mare moments before she would have hit the snow. The drop from the second floor onto a thick bed of snow might not have killed or seriously injured her, but it was still terrifying and wait what?

The mare Twilight held in her magic wriggled her legs as she shouted up at a figure in the window. “I don't want to come back! You're crazy! I could have died! I'm reporting you to the Friendly Firm Fixers!”

“Call the FFF!” Rarity yelled down from the window, “I send them cards every year for Winter Wrap Up and their birthdays!”

“Are you harmed?” Twilight called to the mare who apparently wasn't a suicidal Rarity.

“No—thank you, you can let me down!” Twilight did, depositing her gently on the snow.

“That's the last time I'll ever order a dress from her!” the mare snorted and trotted off haughtily.

“Fine!” Rarity screamed after her. “I’m going out of business! Can't you read? Oh, no, I forgot, you can't even read a price tag that says no refunds or discounts!”

But the mare had disappeared beyond the swirling snow.

“Uh,” Twilight said. “Hey, Rarity.”

“Twilight! What a surprise! Do come in!”

A minute later, Rarity was ushering Twilight into the sitting room.

“I apologize for that little…tête–à–tête, so to speak, earlier.” Rarity gestured, trembling only slightly, to an ornate sofa with an unusual layout. “Have a seat on the tête–à–tête. To what do I owe this visit?”

Twilight chose a simple chair. The sitting room of the Carousel Boutique was classic Rarity: classy and rare, with layers of purple curtains to produce the desired lighting. Unsold dresses on racks occupied most of the unused space, which made Twilight pause. Rarity flopped down on the tête–à–tête, looking slightly defensive.

“Well, you can’t blame me, Twilight. After all, now I have to pay for the broken window!”

Twilight tore her eyes away from the dresses. “Actually, there’s an interesting economic parable about a broken window—”

“But you would simply not believe that pony! Il a la tête dans le cul,” she muttered.

Twilight looked at the couch.

“What?”

“Anyway, what have you come to talk about?” Rarity asked. “I am always delighted to entertain the chief executive economist of our very own daughter bank, not to mention my friend, but you do strike me as the direct type.”

"Well," Twilight said, "I notice you seem to be going out of business." On the same day as Applejack and Pinkie Pie.

"Yes, shame, isn't it?" Rarity laughed, high and artificial. "One must take one's lumps, as they say. Speaking of which, I prefer two with my tea. Et toi?"

"Et none," Twilight hazarded. "I'm a coffee drinker."

“It’s heavily caffeinated,” Rarity assured her. “How else would I get my work done?” She chuckled. “I’m not Applejack; I don’t force my sister to do labor! Sweetie Belle voluntarily helps me spin, weave, loop, cart, carry, and box with those tiny, tireless hoofs of hers. Oh, how much fun she has playing on the dressmaking machines in the basement—”

“Caffeine?”

“Yes.”

“Okay.”

Rarity vanished into another room and reappeared with a tray bearing a silver tea pot, two fragile and expensive-looking mugs, and a number of cakes. She poured the tea and pushed a cake in Twilight's direction. "“Now what’s on your mind, sweetheart?”

“You're—” sweetheart?— “going out of business. It says outside. What happened?”

Rarity shrugged as she lounged oddly on the weird couch. "The vicissitudes of the market. I am sure you know more about it than I do.”

“As an economist, I know all about the practicalities of the business world,” Twilight confirmed. “Still, it seems a little odd. Your dresses are so beautiful that I can't imagine they don't fetch a high price.”

“Yes, the highest,” Rarity beamed.

“Ah...ah.... Rarity?”

“Sweetheart?”

“Maybe your prices are too high.”

Rarity looked at her as if she had suggested they drink something decaffeinated. “Twilight, I charge what my dresses are worth.”

“Um...you charge what they're worth to you, maybe. Uh….” Twilight trailed off. Rarity was giving her a look.

“I have heard such complaints before. They are beyond ridiculous.”

“Um…are you sure…?”

“A mare comes knocking at my door for a dress,” Rarity said icily. “There is a dinner, a date, a dance. Some gala, a stallion from far away, strange features yet a familiar face. Have they met before? Impossible.”

“Uh—”

“But the way their eyes meet! How their conversation flows with the practiced ease of the ocean, deep and powerful, and full of secrets. Music plays; he sways and she notices as she knew she would. Their dance? Two ponies have never been more perfectly matched. His hoof fits into the small of her back as if it was molded for it. When she steps forward, he retreats, like two waves rolling together across the sea.

“Others looking on think they are a bit drunken and foolish, and note the way they keep stepping on each others hoofs. This does not matter.

“A meeting, a kiss, some mutual wonder at the familiar face each has found, though they have never met. Perhaps marriage, many foals, old age together, or perhaps they never meet again. But no matter what, something was created that night that did not exist before. I am an artist, Twilight, and I do not sew dresses, I sew friendships.”

Rarity took a sip of tea. “It's not always foreign romance, of course. Actually, that's a story from one of my delightful paperbacks.”

Twilight gulped. Familiar Hearts, it was one of her guilty pleasures. She couldn’t let anypony know.

“What price the dress?” Rarity said. “No dress, no friendship. What price, then, the friendship?”

“Well,” Twilight said, "to start, how about how much she's willing to pay for it?”

"We discussed this in your house," Rarity said tightly. "One does not pay for friendship."

“I meant the dress.”

“So did I.”

“But you charge for dresses! Too much!”

“Yes! Instead of paying for friendship directly, you buy my dress! Brilliant, non?”

The phrase shabbas goy floated through Twilight’s head.

She sighed and leaned back, rubbing her eyes. “Rarity, if ponies don't want to pay what you're asking, you won't sell any dresses, and you'll go out of business.”

“Their loss!”

Twilight groaned and flopped on the tête–à–tête. “That's the most illogical pricing scheme I've ever heard of, and I just talked to Pinkie Pie.”

“Let me explain it to you,” Rarity said icily. Twilight looked at her in surprise. She hadn't realized the comment would offend her. “I understand full well that beauty is in the eye of the beholder, even if the beholder wouldn't know fashion if it threw her out the window. Ponies do not pay for beauty. They can go outside and look at the grass and the sky and such things. I wouldn't know; I don't go outside.”

Twilight scrunched her face. Rarity was taking her “this is what I think Canterlot socialites sound like” thing too far again.

“Ponies pay for other ponies, Twilight, no pony has the slightest interest in herself.”

“Actually, ponies are self—”

“Self-what? Every pony's self is what other ponies made it! Do you think Applejack grows apples for herself? Fluttershy guards the critters for herself? And Pinkie Pie? The only truly self-absorbed pony I know is Rainbow Dash, and she is loyal to a fault!”

“I do economics for myself.”

“Twilight, please, darling, you're just a little obsessed with a certain princess.”

“I…yeah.”

“And so when I price my dresses, I do not do so based on the cost of the materials, or of my own labor, nor my imagination—”

“I know that!”

“—nor even for the value the pony places on the dress, for you see, the whole world clamors for my dresses, even if not in dress form, as it were….”

Twilight listened, open-mouthed, as Rarity launched into an speech explaining exactly what she had tried to tell Applejack and Pinkie Pie.

“…and I tell the world, be silent, I am working!”

Twilight almost dropped the mug of tea.

“When I fashion a friendship, I do so for two ponies, not one. I charge a price that reflects that. And if somepony asks for a discount, they discount their friendship.”

Twilight leaned back and closed her eyes in concentration. “No, that's just bad price theory. It doesn't matter what your philosophy is, there's a maximum price a pony will pay for your dress. If you charge higher or lower than the price ponies are willing to pay for your dresses, it's the same as throwing money away.

“You care a lot about whether ponies value your dresses. Or maybe you have too much pride to sell to ponies who don't value their friendships, whatever. But you're not acting like you value their valuations!”

“I beg your pardon?”

“A bit flustered, are we?”Twilight was still peeved about the way Rarity had done her whole speech about allocating scarce resources. “Cat got your tongue?”

“Opal? No, she's napping. I just didn't understand what you meant.”

“The ponies of the world cry out to you: Rarity, we want to pay, uh, a hundred bits for your dress! And you look down on them and whisper, 'No.' But when you deny them, what happens? They go to another dress store, Rarity!

“Suppose the market price for one of your dresses is 100 bits. You charge 110. Those ponies willing to pay 100 bits is a whole continuum of ponies, a few willing to pay a lot more than 100, some willing to pay a little more than 100, and a very small number willing to pay no higher than 100. Those ponies? They don't buy the dress.

“What's funny about this is that they want the dress, they've told you that. They've told you they want the dress even more than anything else you might do with your resources. That's what the market price means.” Twilight gestured at the never-worn gowns filling the room like silk tombstones. "They honestly tell you they'll buy the dress at a price worth making the dress to you, you make the dress, then they don't buy it! That's why you have a surplus of dresses! That's why you're going out of business; you might as well be throwing away friendsh—money!”

“Ungrateful—lying—”

“No, you're the one who betrayed them! They told you how much they valued the dress, you knew your values were different from theirs and then shut your eyes to reality! Some Element of Information you are! Don't you have some idea of their idea of beauty? Do you think a dress is all there to friendship?”

Rarity blinked. “There's also hats.”

“Exactly! If a pony pays too much for a dress, she can't buy as nice of a hat. What a disaster that would be!”

Inwardly Twilight cringed. I can't believe what I'm saying.

Rarity looked appalled. “Have I prevented a friendship? Un grand cheval...this cannot be! I must undo—no, a sale! New designs, a d-d-discount, two percent off! No, five! Dare I dream? No, I must!”

“Keep your head out of the clouds,” Twilight said weakly. She could never keep up with Rarity's shifts of mood.

“I rather think I should finally put my head into it, as it were.” Rarity's horn glowed: A box on on a high shelf rattled open: A glass-blue crystal floated out and over to Rarity, who gazed at with such singular intensity Twilight felt embarrassed to be there. The crystal looked like a cloud and was the Element of Information. Twilight hoped Rarity wouldn't cause a fuss.

“Now,” Rarity said suddenly, “how do I find this, ah, market price? With my parasprite, I shall be more attentive than any dressmaker ever could!”

...It was the most benevolent abuse of a parasprite Twilight could imagine. “You need to set marginal revenue equal to marginal cost.”

Twilight looked outside. The sky was darkening fast, another early winter night. “If you'll excuse me, I think I should see Rainbow Dash and Fluttershy before the day ends. Thanks for the tea and the talk.”

“Adieu!” Rarity waved goodbye, then frowned. “Marginal what?”

Twilight bumped into Rainbow Dash on the way to Fluttershy’s cottage.

“Rainbow Dash!” She grabbed the rainbow-maned Pegasus and frowned at her friend’s tired eyes. “Is something wrong?”

“Oh, I just lost three hundred thousand bits on the stock market,” Rainbow Dash said.

“Oh no! You’re going out of business?”

“No, I’ll make double back tomorrow. What’s up?”

“You’re sure you’re fine? Financially?”

“Yeah! I have way more money than you still.”

“Aren’t you afraid of going bankrupt?”

“It’s not that scary. Besides, I’m not afraid of anything.”

Twilight almost moved on. Something in Rainbow Dash’s voice made her stop.

“Not afraid of anything? Not even death?”

“No. Why should I be? He’s honestly a total sap. There’s no muscles on his bones at all, and I’m way faster than he is. I’ve seen the sand in my hourglass. It’s rainbow colored!”

Twilight’s eyes glazed over as Rainbow Dash spewed nonsense. “That’s great, Pegasus buddy. I’m going to go see Fluttershy now.”

“Oh, she won’t want visitors. I just got back from talking to her. She’s got no money. The sanctuary is closing.”

Twilight hurried through the snow. Fluttershy's cottage was on the outskirts of Ponyville through the woods and far too far away. The wind buffeted her face and pushed her back; tiny shards of ice whipped and cut her; and each step hurt more and more. No pony cleared the roads here, or anywhere in Ponyville, but everypony walking along certain paths did something to melt and smooth the way. Here the snow was untrammeled. Twilight resorted to teleporting through it until she tired and stopped. Then, gasping for breath, she plunged onward.

The moon was rising. A hypothesis was forming in the back of her mind. Dread rode her back, spurring her on.

The trees gave way to the white slopes of endless sleep. Suddenly, in the distance, Fluttershy's cottage emerged out of a snowy haze, a thin trail of smoke visible through the powder now falling from the sky. Blinking it out of her eyes, Twilight forced herself forward step by step.

She didn't notice the darkness around the corners of her vision until it suddenly swam over her; a pulse in her head rushed painfully through and reverberated. The pain forced to her knees and her face to the snow, not feeling the cold until it passed.

She thought about standing up.

Did.

Sagged.

Oh crap oh crap oh crap

Too much magic, too much thinking, and it had to catch up with her here of all places, too far to go forward or back, no pony in hearing distance even if she shouted, and she didn't think she could shout.

The wind whipped around her, cold, cutting. The air was full of scythes.

Blackness like a cloak of night descended.

Smelled like soap. And, at the same time, animal dung.

“Goodness, look at you!” Fluttershy said. “Don't worry, Twilight, I'm going to take good care of you. Mr. Bear, could you please help carry her to my cottage? Thank you so much. Mr. Owl, could you send a message to Spike letting him know Twilight is with me? Thank you!”

“Unghughuh,” Twilight said, which is the concussed version of “Fluttershy, is that you? Thank goodness! Listen, we have a lot to talk about, mostly economics. Let me guess, you've suddenly run out of money to support your animal sanctuary?”

“I’m going to warm you right up and give you some medicine. Just in here, Mr. Bear, oh thank you. I don't know what I'd do without you! Oh, dear, I suppose I'll soon find out. Oh, uh, d-don't worry about it, Mr. Bear, I didn't mean anything by it!”

“Arhbalbahh,” Twilight said, which is Concussed for “Arhbalbahh.”

Author's Notes:

If you're wondering why Rainbow Dash didn't offer to support Fluttershy's sanctuary, she isn't running a charity.

In the alternate version of this chapter, the one where Rarity doesn't learn her lesson, it begins to snow dresses until the earth is buried under six feet of silk and lace. Make of that what you will.