[danuker]

What is a fair price? There is no such thing.

An economically optimal price is one that maximizes total profit.

If it's too high, fewer people will buy the product, which might reduce profit. If it's too low, the profit margin will be small in spite of lots of units sold.

[JumpCrisscross]

> What is a fair price? There is no such thing

It's subjective, but that doesn't make it nonexistent. I pay $10/mo. for Spotify. I'm happy with that. I think I get great value for that money spent. If someone came out with an $8/month streaming service, I'd scrutinize it fairly closely before contemplating switching.

[pessimizer]

Are you actually saying that you would refuse to use a service (all other things being equal) that was $8/month because $10/month is what you think is "fair?"

If so, I'd mark that behavior as strange, and not actually evidence of the existence of a "fair price." There's no way this behavior is typical.

If what you're saying is that you'd assume a price lower than $10/month would have other, unseen problems, then:

1) You're not referring to a "fair price" but instead a believable price, which is a compromise between what you want to pay (which is nothing) and what you estimate to be the price of delivery, and the odds with that price in mind that what you receive will be adulterated/lower-quality than advertised.

2) How is $10/month fair? No wonder musicians don't make any money.

[dragonwriter]

> It's subjective, but that doesn't make it nonexistent.

Yes, it does. Subjective assessments have no objective reality.

[JumpCrisscross]

> Subjective assessments have no objective reality

Subjective assessments drive political preferences and policy, to say nothing of human relations and experiences.

[dragonwriter]

Hallicinations of the expressed wishes of divine figures do that, too.

Still doesn't make those figures, or their wishes, real. Beliefs about fair prices exist, fair prices themselves do not.

[slaymaker1907]

Only if you assume humans are purely self centered rational agents. In practice, many people do care about what a "fair" price is and don't just charge as much as possible in pursuit of profit.

[belltaco]

We are talking about music, not insulin. There's probably hundreds of millions of different songs including the ability to listen for free on radio with ads, YT etc.

[adamc]

This is an absurdly limited point of view. If I charge 3x as much as other vendors, then force them to raise their prices by firebombing businesses that don't comply, it might (conceivably) maximize profit, but most people would think it unfair, largely because it was founded on unfair restraint of trade.

I don't think the prices on music were unfair before. No one has to have music, and there was no evidence that the prices were enforced by unfair practices. They were just higher than people wanted to pay.

But most people would say that Enron's manipulation of energy markets was quite unfair.

[nybble41]

> there was no evidence that the prices were enforced by unfair practices

Copyright is the unfair practice at work here enforcing high prices for distribution of information, a service which can be provided at practically zero cost when not restrained by force.

[dqpb]

> An economically optimal price is one that maximizes total profit.

The economically optimal price is the one that maximizes total value in the long run.

[danuker]

> maximizes total value in the long run.

What value? Units sold/quantity of product? If so, should businesses operate at breakeven in the long run?

This is an interesting take, it is optimal for everyone, not just the producers. I agree that this would be the ideal scenario for society.

The problem is - how to arrive at it?

Profit sends a message that offering X instead of Y is more profitable - and therefore, better use of one's time.

How would you reduce/remove profit without destroying incentives to innovate or even pivot to new industries?

[kbad1000]

Yes, but it depends if the goods or service is essential. Is knowledge/ education/ access to information essential?