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Isn't the logic that people are willing to pay a certain amount for cereals, and that amount is well over the cost to produce it? And something like and airline
by nathanvanfleet 10y ago
Isn't the logic that people are willing to pay a certain amount for cereals, and that amount is well over the cost to produce it? And something like and airline is much more costly and people are less able to pay the amount needed for a cereal-like margin?
- sdenton4 10y agoRight, and if one cereal decided to significantly discount itself -lose some money for a while - in order to capture more market share, it could lead to a pricing death spiral if the other cereal makers tried to keep up, and people's mental model of what cereal costs went down along the way...