It's a very important point; this false argument is often used. In truth, in the marketplace, goods are not priced at 'cost-plus'; i.e., they aren't priced by taking the cost to the vendor and adding a profit margin.
Goods are priced at the point that will maximize profit for the vendor; economists would say at the point that maximizes marginal profit. Colloquially, they charge as much as they can.
The fact that the vendor has another stream of income from Product B doesn't cause them to reduce their prices for Product A. Microsoft doesn't cut the price of Windows because they are making so much from Office.
Microsoft did cut the price of Windows to get people to adopt it early on because they would be making so much money from Office.
Microsoft Word vs. WordPerfect, Excel vs. Quattro Pro and Lotus 1-2-3. These battles were won because of Windows and that cemented their position as industry leader.
Now that Microsoft is in a dominant position they don't cut the price of Windows as much, but to remain on top they do give the OEMs a very sweet per-unit deal they really can't refuse.
If that's true (and that's not my understanding) they did it to gain marketshare and maximize profit, not because they already had enough profit. In that scenario, they cut the price of Windows to make even more from Office.
Republicans argue for "free-market solutions" which are actually government granted or encouraged monopolies where no competition exists.
There lots of examples of free market capitalism making the world a better place and markets failing as well. There are examples government run services providing great consistent services and there are examples of government bureaucracies soaking up budget and graft in their own or lobbyists interest.
Which tool do you think will work best in this situation and why? How do you plan to deal with the inherent problems of government involvement in ISP regulation?
I'm just tired of "free market solves all" vs "corporation are evil, government is universal solution". We learn nothing and convince no one.
Same with Internet. Back in the days I had a plan like that, where Internet would be faster and wouldn't count towards your quota if used in the night. All the heavy downloads would be scheduled to run overnight
EDIT: Perhaps more importantly, dynamic priceing could be more efficient than a regime in which you can use huge amounts of water at a low fixed cost, and then suddenly none when it runs out.
Right, and the point of a water ration is to ensure that everybody limits their water use to some prescribed amount.
What you and the OP are describing is arguably a bug, not a feature.
The point of contention here is not of price economics per se, but of politics. At issue is whether or not one should be able to circumvent a ration by virtue of his monetary resources. Some people (including myself) find this notion distasteful.
It shouldn't be this way. It serves no purpose. You first claim that everybody has access to resource X at a reasonable price (because we don't want to discriminate against poor people), then when resource X starts to run out, they enforce bans instead of charging more to people willing to pay a premium (and getting the resource first) and then using it to expand production and access to everyone.
This story plays out everywhere, whether in Soviet Russia or in California or in NHS.
Almost certainly.
Take all the content available to a cable subscriber, and the money that goes into producing that content. Take out the ads and split the bill (in addition to the relatively low costs of operating/maintaining the cable company itself) among the subscribers. That's just covering costs; now add a bit of profit to motivate those companies to stay in business.
There's no question you'd be paying more - a lot more. We just don't think the ads are saving us money because we don't know any different - that's just the way TV has been since the beginning.
Those poor people will pay one way or another. Given the indirectness and inefficiency involved in the advertising approach, I wager they'll pay more that way. And it'll be less fair: people with less willpower will pay more.
Advertising makes sense when direct payment is impractical. Broadcast TV is the classic example. It's really hard to charge money for it, so ads let you indirectly collect money from your viewers. On the internet, paywalls are practical technologically, but tend to add too much friction, so we get ads instead. But there's no reason for it here.
We need to think of the internet as a public utility. How absurd would it be if every time you used water in your home, you heard an advertisement playing from a speaker in the faucet.