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>The economist sees value being passed on to American citizens in the form of a price reduction of Apple products The person in denial more like. Any ecomomist
by polshaw 15y ago
>The economist sees value being passed on to American citizens in the form of a price reduction of Apple products
The person in denial more like. Any ecomomist would realise the price of apple products is tied to how much you will pay (ie for profit maximisation), not how much it costs. That is how you make over $400k per employee.
The article points out that wages are a small part of the cost.
- smilliken 15y ago>Any ecomomist would realise the price of apple products is tied to how much you will pay, not how much it costs. It's tied to both. The profit maximizing price varies with production cost.
- panic 15y agoThat's a false dichotomy. A good's price is tied to how much you'll pay and how much it costs. If an iPhone cost $200 more to make, it'd be a good bet that it wouldn't sell for the same price.
- ams6110 15y agoNot really. The price is a function of the value to the buyer, which drives demand and is independent of manufacturing cost. Above a certain price I just won't find an iPhone to be providing value, so demand will drop. Apple has some room to cover costs with price increases, but it's limited.
- chancho 15y agoIf the good costs more to make than the buyer is willing to pay then there is no price because there is no sale, so clearly price depends on cost. Functions can have more than one input.