3 ms·

The higher priced goods are going to move slower. The $20 price tag reflects the higher quality packaging (to reinforce the message that THIS is better quality)

The higher priced goods are going to move slower. The $20 price tag reflects the higher quality packaging (to reinforce the message that THIS is better quality) and targeting of higher spending customers, the higher price to the retailer, and the amount of time it has to sit on the shelf. Turnover is king as all retailers and manufacturers are sensitive to holding products. Warehousing has a steep cost.

mapt 2y ago
* European double-pane sash windows: Effectively banned by various regulations * American double-pane sash windows on hardware store shelf: $100 * European triple-pane tilt turn windows, on hardware store shelf: $200 * American triple-pane tilt turn windows, 'call for quote': $900 ... * No Salt Added Snacks in the health food section for 10% of people: $4 * Lots of Salt Added Snacks in the main section for 30% of people: $2 * The 60% of people who would prefer a moderate amount of salt for $2: Not a part of the Nash Equilibrium There are all sorts of areas where the market offers suboptimal choices because consumer pricing, availability, product segmentation, and market segmentation is a game that is somewhat orthogonal to the range of consumers' ideal outcomes. Sometimes, regulation significantly improves those outcomes in a way that prices cannot. Banning slave labor is one example where it would be a significant benefit for a trivial cost, but the market absolutely isn't structured to pay that cost using higher prices. Externalities not paid by consumer or manufacturer is one category of those benefits to examine, but there are many more.