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Originally Posted by S2kracka
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.
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I think we're arguing the same thing. The difference is you interchange "demand" with "demand for low prices". To me "demand for low prices" makes it sounds like Walmart sells Mobil 1 for $1-$2 less because that's what I (the consumer) want and they're doing it because they love me. My point is they're doing it to undercut competition (which is exactly what we both posted), I guarntee the moment that competition is eliminated the price goes up or at least stops going down.