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by notahacker
3572 days ago
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It's a different spin, but 'price gouging" is by definition extracting consumer surplus from those willing to pay more if necessary. The other way of spinning those figures is that if consumers spend $1 for every $2.60 they're willing to spend on Uber then Uber rides is doing an unusually efficient job of revenue maximization compared with most other businesses, particularly considering a large part of their brand value is being perceived as relatively cheap. That's particularly the case when you consider that consumer surplus is also Uber's competitive moat against potential new entrants to the market that couldn't compete with Uber on price; as the paper's author's point out it's a short run consumer surplus and the long run demand elasticity is likely to be much lower. |
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