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Information has a non-zero cost for the first unit, and zero cost for each unit thereafter. In other words, marginal cost is zero. These types of goods are hard
by spencerchubb 4y ago
Information has a non-zero cost for the first unit, and zero cost for each unit thereafter. In other words, marginal cost is zero. These types of goods are hard to find a market equilibrium for.
- ghaff 4y agoI'm not sure that's true. You're describing just about every SaaS out there. (Yes, there's some per customer cost of resources and sales/support but in general relatively little compared to initial and ongoing development.) What is true however is that you need to be able to prevent people from acquiring your product/service for that very low or zero marginal cost.
- oq_pmg 4y agoThat's it - ongoing development. You should constantly invest in the development of your SaaS product, unlike the example with the books
- ItsMonkk 4y agoPaul Samuelson[0] makes the argument here[1] when discussing how lighthouse economics works that anything with zero marginal costs that has a price other than free is by definition an economic loss. Therefore you should find other ways to fund lighthouses, and by extension, all media and software. [0]: https://en.wikipedia.org/wiki/Paul_Samuelson https://en.wikipedia.org/wiki/Paul_Samuelson [1]: https://courses.cit.cornell.edu/econ335/out/lighthouse.pdf https://courses.cit.cornell.edu/econ335/out/lighthouse.pdf - page 359, first paragraph