zero profit is a long-run equilibrium in a competitive market

Music Lane

It's all about the music, dude! Sit down, relax and listen to some tunes.

Posted by Frihed89 (A) on June 5, 2012 at 22:00:05

In Reply to: RE: I think it's a good strategy. posted by Tadlo on June 5, 2012 at 13:01:04:

Prices rise due to demand increases. Then it's time to invest (or get out) to get back in equilibrium.

However, this market is hardly competitive and this is a pure pricing strategy on the part of an oligopolost.

On the other hand, as the OP correctly pointed out, while the cost of making and marketing information may be high, transmitting that information (per unit) costs almost nothing. Given this problem (pointed out by Arrow), there tends to be under-investment by producers in information, and it is optimal. Hence, copywrite laws.

This post is made possible by the generous support of people like you and our sponsors:

Follow Ups Full Thread

Topic - HJ Lim Complete Beethoven Piano Sonatas $9.99 at iTunes - srl1 14:32:52 06/04/12 (12)

I keep thinking these recordings will show up on Spotify, but they haven't yet [nt] - Chris from Lafayette 15:51:13 06/05/12 (0)

RE: HJ Lim Complete Beethoven Piano Sonatas $9.99 at iTunes - Thornhill 09:35:04 06/05/12 (10)

I think that this is an experiment for EMI - Kas 13:58:43 06/05/12 (0)

I think it's a good strategy. - rbolaw 11:08:20 06/05/12 (7)

RE: I think it's a good strategy. - Thornhill 12:22:38 06/05/12 (6)

RE: I think it's a good strategy. - Tadlo 13:01:04 06/05/12 (5)

Heard that already. Can't recall exactly: was it 1929? n/t - Luciano,IT 23:15:19 06/08/12 (0)

It's not that black and white - Thornhill 06:34:49 06/06/12 (1)

RE: It's not that black and white - Kas 11:45:04 06/06/12 (0)

zero profit is a long-run equilibrium in a competitive market - Frihed89 22:00:05 06/05/12 (0)

RE: I think it's a good strategy. - rbolaw 14:03:01 06/05/12 (0)

Just think what they could sell the 85 DiscToscanini for... - srl1 10:33:39 06/05/12 (0)

Follow Ups

zero profit is a long-run equilibrium in a competitive market - Frihed89 22:00:05 06/05/12 (0)

Post a Message!