Re:Startups building balloons to hoist tourists 100k feet in...
by aleph_minus_one on Friday July 19, 2024 @11:16AM
(#41007352)
> That price seems crazy to me. It's "just a balloon" I don't see what their hard costs are that make this more than the cost of a commercial flight.
Answer: exclusivity.
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Or to explain the topic in economic terms: with their offering, these companies offer a given supply for balloon rides into the stratosphere. On the other hand, for a given price for such a ride, a demand to buy it for this price. What a company wants to optimize is
(number of sales for a given price) * price.
Since the supply is currently rather limited, the price can be set to a very high value to optimize this function.
Answer: exclusivity.
---
Or to explain the topic in economic terms: with their offering, these companies offer a given supply for balloon rides into the stratosphere. On the other hand, for a given price for such a ride, a demand to buy it for this price. What a company wants to optimize is
(number of sales for a given price) * price.
Since the supply is currently rather limited, the price can be set to a very high value to optimize this function.