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Thanks for the thoughtful reply. If a product is already priced optimally, lowering the price to capture price-sensitive users would reduce overall revenue, rig

• gostsamo 2y ago
  The current optimal price is set with the extra cost of Apple rentiering included on the production side. Minus that cost, the developer might find another optimum.
• rrrrrrrrrrrryan 2y ago
  > I'm not sure all developers would reinvest additional earnings into their products rather than just increase profit margins or divert funds elsewhere A mega corporation like Apple is much less likely to do this than a smaller company, though. Apple's quarterly dividend is literally the company communicating that they make so much money they can't think of anything better to do with it than just giving it away to the investors.
• lopis 2y ago
  Companies would sure not reduce the price by 30%, but perhaps 10%. This would mean their revenue increases, and the price conscious user saves money as well. I doubt any users would opt for not using the apple store if the price wasn't significantly lower.
• rodonn 2y ago
  The profit maximizing price after a 30% cut `q(price) * (price - 30%price)` is not the same as the profit maximizing price without that cut `q(price) price`. As long as the demand curve is downward sloping, there will be some pass through of Apple's cut to customers, though the fraction that is passed through will depend on price elasticity.