Re:Toyota owners have to pay $8/month to keep using their ke...
by jjk166 on Monday December 13, 2021 @06:10PM
(#29545967)
If you derive more than $8 of value from something, then buying the $8 thing is not explicitly off the table. But if you can get the exact same thing for free, or even just for $7 elsewhere, it would be really dumb to buy it for $8.
The cost that it takes to provide a good or service is useful for estimating the cheapest available offering. No one is actually going to sell something at cost, but in an efficient market with lots of competition the margin should be whittled away to something very low. If someone is charging significantly more for something than it costs to make, it means they are abusing their market position. Monopolies still need to price their offerings at a point where people don't rage quit and not buy at all, but their goal is to get as close to that number as possible while staying below it for the optimally large section of their customers.
Just because things could be worse doesn't mean they're good and you should be happy with the situation.
If I get $8 of value from something, it doesn't reduce my willingness to pay if I suddenly learned that it cost $0 or $1 to provide it rather than $5 or $6. Likewise, if I learned that it cost $10 to provide it, that doesn't make me suddenly willing to trade away $10 or $11 for something that's worth $8 to me. (In a negotiation, I might negotiate differently if I knew the other side's cost structure, but in a "take it or leave it" sale, I decide based on the value to me not the cost to the other party.)