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by pests 2228 days ago
"[...]disconnected from any actual cost basis[...]"

Not everything is priced based on the cost of it's inputs. In this case it seems to be what the market will bear.

1 comments

Which in this case is exorbitant and is something that we should oppose. Pricing as much as the market will bear is not good for consumers, and in some cases is a red-mark of market failure (not in this one, as of yet).
> Pricing as much as the market will bear is not good for consumers

To be fair, that's how all products are priced in general: production cost defines the lower bound and what customers are willing to pay defines the upper bound, and the goal is to maximize what the customer pays.

The theory is that as time goes on, the prices moves from what the market will bear to become closer to the cost of production. When this does not happen, it is a failure of the market.