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Politics : Formerly About Advanced Micro Devices
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To: Joe NYC who wrote (108856)5/1/2000 9:48:00 PM
From: Scot  Read Replies (1) of 1577194
 
A Microsoft study from November 1997 reveals that the company could have charged $49 for an upgrade to Windows 98 ? there is no reason to believe that the $49 price would have been unprofitable ? but the study identifies $89 as the revenue-maximizing price. Microsoft thus opted for the higher price.

You (or actually judge Jackson) make it sound like MSFT is the first company in the world that tried to maximize revenue (more accurately profit) in deciding how to price a product. Maximizing profit is something normal, all companies do this.

In a sentence, monopoly pricing is about charging MORE than competition would allow if the good were sold in a true market. Imagine if instead of being able to buy your AMD shares at the NYSE, you had to buy from one person who could charge more than the price the shares would bring in a market such as the exchange. That's the difference and the best I can explain it as a summary. Sorry..I'm too tired to elaborate and discuss demand curve and marginal pricing.

Regards,

-Scot
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