| [ said by anon222 : what the poster is getting at is the only cost that increases for Verizon is the cost of transfered bytes for said customer and the cost is very low for them. What law requires that selling price be based on marginal cost?
Consider toll roads - If one additional vehicle goes across the road, do their costs increase? Should all the drivers get a rebate?
Consider airlines - If one more person gets on the plane, do their costs increase? Should that person fly free or all the other passenger tickets be reduced?
Pricing is based purely on what a person is willing to pay. If that covers costs plus a profit over the long term, then the business will continue. If not, it will shut down.
The primary flaw with cost plus pricing is that there is zero incentive to reduce the cost. If you know you are always going to get a certain percentage, why would you ever spend any money on improving what you are selling?
Profit is the motivation to invest. High profits attract competitors which drive prices down. Ultimately, the consumer can just say no and drive the company out of business. How's that for power? |
