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They'll raise prices on advertisers in the UK, who will subsequently raise prices on consumers.
by darawk 8y ago
They'll raise prices on advertisers in the UK, who will subsequently raise prices on consumers.
- ben_w 8y ago“Why weren’t you already charging more, if you could?” Would be my obvious first question at that point, if I was a shareholder.
- darawk 8y agoBecause the competitive equilibrium doesn't allow it unless the cost curve shifts for everyone at the same time.
- ben_w 8y agoThey are not shifting for everybody at the same time, they are shifting only for “tech companies”, who are currently perceived (rightly or wrongly) as undercutting “normal businesses” in an unfair way. (Scare quotes because in practice I don’t trust the UK government know what they mean by the words).
- darawk 8y agoWell, then tech companies will raise prices and product makers will buy fewer ads, leading them to increase the ad load, or similar. It demands on the demand elasticity.