| Matthew Rosewarne on 28 Dec 2008 19:38:32 -0800 |
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On Sunday 28 December 2008, Casey Bralla wrote: > Markets set prices. Producers either sell at the market price, or don't > sell at all. If they can make money at the market price, they will. If > there's lots of money to be made at the market price, then lots of people > will figure out how to enter the market to get some of the big profit. > The price of the product is only tangentially related to the cost to > produce it. > > Texting is expensive because lots of peopel are willing to pay the high > prices for the right to do so. (I don't pay it, but that's my choice). > If fewer people were willing to pay for the feature, or one supplier > realizes they can make more money by selling more texting at lower unit > costs, the price will fall. > > > Adam Smith was right. Nobody's been able to figure out how to overcome the > laws of supply and demand over the long term, despite lots of very smart > people trying very hard to do so for 200+ years. Adam Smith and free-market economics has very little to do with the telecom industry. Rather, the ability of the telecom companies to make a massive profit for a relatively small expense has far more to do with their ability to use government institutions to stymie competition and subsidise their infrastructure costs. Attachment:
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