Hmm... What is the expected cost in the real market for a pair of designer basketball shoes? Is it a 50% or 100% markup on the base cost of production of the shoes in east Asia (not much) or is it based on the willingness of customers in the U.S. to pay -- $100, $150, etc.?
The pricing question involves value -- what is the profit value for the producer and the consumption value for the consumer? The producer wants to maximize profit but is constrained by the consumer's willingness to pay, not by some arbitrary markup limit. If something costs $10 to make and people are willing to buy everything the producer can get to market at $100 an item, the price in a real market may well be $100. About the only reason to lower price would be to discourage competitors' entering the market and selling the same item for $95.
That's not the issue here. This is more like a commodities market -- the pistol is the pistol is the pistol and there is one price which is driven solely by demand relative to other items. The market determines that this shotgun has x% more value than this other shotgun, because that is what the market is willing to pay for it.
A tethered prototype is to be presented at the World Summit on the Information Society in Tunis on November 17. Production is to begin by the end of 2006.
For more info, see a class presentation on the $100 Laptop at
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Hmm... What is the expected cost in the real market for a pair of designer basketball shoes? Is it a 50% or 100% markup on the base cost of production of the shoes in east Asia (not much) or is it based on the willingness of customers in the U.S. to pay -- $100, $150, etc.?
The pricing question involves value -- what is the profit value for the producer and the consumption value for the consumer? The producer wants to maximize profit but is constrained by the consumer's willingness to pay, not by some arbitrary markup limit. If something costs $10 to make and people are willing to buy everything the producer can get to market at $100 an item, the price in a real market may well be $100. About the only reason to lower price would be to discourage competitors' entering the market and selling the same item for $95.
That's not the issue here. This is more like a commodities market -- the pistol is the pistol is the pistol and there is one price which is driven solely by demand relative to other items. The market determines that this shotgun has x% more value than this other shotgun, because that is what the market is willing to pay for it.
A tethered prototype is to be presented at the World Summit on the Information Society in Tunis on November 17. Production is to begin by the end of 2006. For more info, see a class presentation on the $100 Laptop at
r ed_dollar_laptop/ .
http://www.emory.edu/BUSINESS/et/552fall2005/hund
There's current info from a lot of Internet sources, on the device, the project history, the technologies, and the implications.