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From the revenue extraction POV, the optimum price is such that user is unhappy to pay it, but is still paying, while raising the price even by a small amount w
by nine_k 2y ago
From the revenue extraction POV, the optimum price is such that user is unhappy to pay it, but is still paying, while raising the price even by a small amount would convince the user to cancel the service.
This means that the companies are constantly testing this edge, and check whether too many subscribers start to fall off the edge when the price rises.
- wruza 2y agoWhen being a douchebag becomes a proper economic principle.
- Vampiero 2y agoIf only someone had warned us...
- Ey7NFZ3P0nzAe 2y agoThis is only true in economics model that do not take any morality or the customer's satisfaction into account.
- Vampiero 2y agoThat is literally any economic model that assumes capitalism as the underlying system. Morality and ethics are just a way to hurt profits.
- nine_k 2y agoCustomer satisfaction is priced in: the customer is still satisfied enough to keep paying, by their own free will. Entities like corporations aren't conscious and have no morality. They often discover and apply such things much like the biological evolution discovers and applies things. The closest proxy to morality that affects corporations is law; I assume here a completely legal, free interaction where the customer is not even held by an imperfect, monopoly-dominated market, like suburban internet access, or, well, sports events broadcasting.