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Originally Posted by CDeutsch
I don't think consumer demand for low prices plays as big of a role as you think. In fact I'm betting it's pretty insignificant. Walmart doesn't have low prices for the benefit of the consumer. They're low because they want to beat their competition.
Look at industries that have a monopoly like music, broadband, phone companies etc. Their prices don't budge until there is competition.
Companies offshore as a way to lower costs, which can be used to increase profits and/or under cut your competition. They're not doing it to give you a good deal.
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I'm sorry, but you missed on every one of your points. You'd be very surprised at just how much time and money cable companies (for example) spend on pricing research. There is a certain point on the demand curve that maximizes their profit. If there wasn't, why not just jack up the price to $100/month for basic cable? The answer is simple, there would be very little demand at that price. Consumer demand for low prices plays a HUGE roll actually, if it didn't, they woudn't need to continually drop their prices in order to remain competitive since it does nothing but hurt all competeing companies by lowering their profit margins.