[fishtoaster]

Ah, I was using the term "revealed preference" which has a slightly more nuanced meaning[0].

In the colloquial sense, yeah, we all have a preference for "good pizza" and "cheap pizza." But those two things are generally a tradeoff: better pizza costs more. There exists some equilibrium point in the middle where either making the pizza better + more expensive or making the pizza cheaper + worse will reduce sales (within a given population), and pizza shops will tend to coalesce around providing pizza at that equilibrium.

The position of that equilibrium point is the "revealed preference" of a population. We might say we want better pizza than is currently being provided, but when we vote with our wallets, we (collectively) tend towards pizza that costs as much as it does and is as good as it is.

[0] https://en.wikipedia.org/wiki/Revealed_preference

[setr]

But we can also pay for good, or expensive pizza, and we will find the box remains the same. If it were simply consumer preferences, then we’d expect this to no longer be the case as we enter more price-agnostic tiers of consumerism.

Unless of course no one cares about the box, so the increased cost literally does nothing, but that just means the improved boxes are not actually an improvement.

More specifically, don’t look at the market as a single unit, but as various buckets with various equilibriums. We expect Mercedes to target the equilibrium point… but not of the entire market (that’s what Jettas and Camrys are for) but rather their niche.