John quoth:
> Sean Luke wrote:
>> Moral reasons aside, Paul's economic goal is to find
>> the high point on that curve. That is, he needs to find the price
>> which
>> will give him the highest net profit.
>
> That is incorrect. You have left out the important factor of Paul's
> time for
> support.
Ah. Yes, I did. And shipping. :-) Okay, so there is a built-in
support cost for Paul which will shift the curve upward, you're right
there.
Though I imagine the support cost will not be significant, both because
the number of people involved will be small, the group's experience with
the betas will significantly lower the handholding required, and because
Paul's going to stomp the same number of bugs regardless of the number
of people whining. I'm sticking at $30.
>> And there is no support and no established
>> track record in the product as well.
>
> When did Paul say that there would be no support for his ATA product at
> the 40
> Euros price?
Here, by "support", I had meant phone banks of technicians waiting for
you to call 'em up and have them put you on hold. :-) Sorry 'bout
that. Your support point above is well taken. Also: no manual and no
box. Seriously, that's an amazingly high amount of the cost for some
shareware.
>> Paul's betting that $50 is the maximum profit point on the curve.
>
> I don't think he is. I think Paul is well aware that he might sell
> more of
> the product at a lower price -- and, in the end, gross more cash. But,
> again,
> you have to factor in the value of Paul's time when it comes to how many
> people he needs to deal with.
I was computing profit *after* cost is deducted. So it's still rational
to find the maximal profit point.
Sean
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