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At the lower price, you produce a lot more consumer surplus. This is valuable if you're the charitable type.
by phob 15y ago
At the lower price, you produce a lot more consumer surplus. This is valuable if you're the charitable type.
- kristofferR 15y agoIt will also lead to, if the app is a good experience for the customer of course, more word of mouth marketing which can lead to more publicity and more sales.
- cpeterso 15y agoWhat is "consumer surplus"?
- harryh 15y agoLet's say there was an product that you were willing to pay $10 for, but someone was selling it for only $6. By purchasing the product you get $4 worth of consumer surplus. In general you probably get at least a bit of consumer surplus for everything you buy. The more surplus, the easier the decision to purchase (Of couse I would like to buy that brand new MacBook Pro for 10 bucks, thank you good sir!).
- netcan 15y agoadding to that.. @ half the price and twice the customers you have all the customers who would have bought at the higher price "earning" whatever their surplus would have been + the (half) price - . On top of that you have all of the new customers "earning" a surplus beteen zero and the lower price.
- pmiller2 15y agoIt's money you're leaving on the table that people would otherwise be willing to pay you.
- tsm 15y agoMy microeconomics professor calls it the "good deal feel". That is, the difference between what customers expected to pay and what they ended up paying (savings).
- jklp 15y ago> What is "consumer surplus"? This reminds me of an old article written by Joel Spolsky which explains it quite well. http://www.joelonsoftware.com/articles/CamelsandRubberDuckies.html http://www.joelonsoftware.com/articles/CamelsandRubberDuckie... It also goes into detail about different pricing models too which I found a good starting off point for a programmer to learn about pricing.