31–40 of 77 posts
Try $3. I think it was a coincidence $5 and $1 had the same revenue. The maximum revenue price point should be in between. // guy who studied first year microeconomics.
So, of the people paying $1 for the product, you know that half of them would gladly pay $2? Sounds like it's time for 2 versions of the product : (i) The almost-full-featured version ($1) and (ii) The super-duper gold-plated version ($2). The removed feature doesn't even have to be very useful : You might lose 10% of the $1 value people, but snag 25% of the $2 value people (who just want some justification for payin…
edit: or is there a good reason we shouldn't do this?
A fine example of the price elasticity of demand. Not surprising in the slightest, but a helpful real-world illustration.
Actually, I found it surprising because almost all theoretical economic models seem so divorced from reality that nothing ever works as you expect.
Even though the axioms (assumptions) for rational choice are rarely met completely in practice, understanding their implications were they to be met is still highly useful.
Earlier quoted context omitted.
At the lower price, you produce a lot more consumer surplus. This is valuable if you're the charitable type.
What is "consumer surplus"?
Earlier quoted context omitted.
At the lower price, you produce a lot more consumer surplus. This is valuable if you're the charitable type.
What is "consumer surplus"?
This reminds me of an old article written by Joel Spolsky which explains it quite well.
http://www.joelonsoftware.com/articles/CamelsandRubberDuckie...
It also goes into detail about different pricing models too which I found a good starting off point for a programmer to learn about pricing.
mostly unrelated but: could the parenthetical after the title of a post be modified to include subdomains? Seeing (google.com) made me think Google was saying "No matter what price we choose...", whereas if it said (plus.google.com) I'd realize it's likely just a "blog" post by somebody. edit: or is there a good reason we shouldn't do this?
God forbid, Google starts posting their product news/updates on Google Plus. Then, I would heartily agree with your solution.