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skeechan
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reply to haroldo

Re: [iPhone] Do you think the iPhone is a good "value"

Bezos is not telling the truth. Bezos' statement should say there are two kinds of companies...those that create their own products and those that sell other people's products. Those that create and sell their own set the price for them. Those that don't have to compete with others that are selling the same item. We see this duality with the Kindle Fire...it's not the cheapest tablet around. Amazon prices it for profit maximization (where marginal cost equals marginal revenue), not at the absolute cheapest they can sell it for. Meanwhile their resale stuff is damn cheap...not because they love selling cheap stuff but because if they don't, it won't sell.

The truth is if Amazon could get away with charging more, Bezos would absolutely be doing it. But he can't. So it is like tripping and falling on your face then saying, "I meant to do that."


haroldo

join:2004-01-16
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1 edit
said by skeechan:

.... Amazon prices it for profit maximization (where marginal cost equals marginal revenue)...

Not sure where you got your info, but they don't make any money on the Fire, they are pushing it to drive content and build their customer base. They know that once you have the Fire, you'll buy ebooks, music, etc. from them...it's almost a loss leader, but it's anything but a profit maximizer.
The newer version ekes out the smallest of profit margins »www.usatoday.com/story/tech/2012···1684863/
Marginal cost equals marginal revenue??? (Not sure what your getting at) That doesn't lead to maximization of anything.