PCS, do you mean to say that after all these years you didn't see the difference between actual cash out the door marginal costs of supply, and sunk capital?
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Do you mean you think the underling costs of the actual service (backhaul, etc) should be affect the price to the consumer?? This is quite a revelation you have reached Maurice. >
If a business costs a fixed $1 billion to launch and the product is sold by the hour, with no ongoing charges, then that's a good case for supply and demand pricing.
If a business has no capital requirement to launch but has $1 an hour cost to provide the service, then of course the least that can be charged is $1 per hour. There might be a case for giving away some of it free to get some street cred, show it works, gt some publicity.
Growing tomatoes is a bit like growing megabytes with Globalstar, and they are as perishable.
As tomato growers figured out long before Wacky Wireless was invented, the way to sell tomatoes is by auction with the possible buyers bidding for the stock. Highest bidder takes how many they want.
As retailers figured out long before Wacky Wireless saw the light of day, the way to sell tomatoes to individuals considering their options at the shop is with fixed prices, which are based on the price paid at auction. The retailer obviously can't hold an auction with just one buyer wondering whether to buy or not, though they might negotiate individually if the price of tomatoes is high enough to justify the individual attention.
A tomato farm costs a large upfront capital investment to get the tomatoes ready to pick. Buy the land, build a glasshouse, by all the gear such as a compac.co.nz sorting machine, get to work on planting and tying and all that. Finally, after huge expense, the crop is ready, all at once. They will perish in a few days. It's like Globalstar.
Mqurice |
