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Note that making the lowest tier product cost less requires the highest tier product to cost more. (Say the lowest tier widget costs $10 and sells 1000 units.
by mcguire 7y ago
Note that making the lowest tier product cost less requires the highest tier product to cost more.
(Say the lowest tier widget costs $10 and sells 1000 units. The higher tier costs $20 and sells 100 units. The average revenue per unit is $10.91. The question then is, how many units would they sell if the single-tier unit price was $11?)
- pfranz 7y agoWhat you're saying is true, but it's just the price floor and often not the actual sale price. It's more often "what the market will bear." "Professional" customers are often happy paying significant premiums. If it makes me 2x-10x more productive, the cost is of little relevance. "Consumers" are a lot more price sensitive. A durable orbital sander doesn't mean much if I only use it once every few years. I do hate the idea of software unlocks, though.