Quote:
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Originally Posted by PrinceOfCats
As an economics question:
The most allocatively and productively efficient system is PC. Firms in PC do not have ANY profit margin. The fact that luxury companies are able to not lower their prices shows that they are inefficient and exploit monopoly power.
Yada...
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At the same time, luxury good is so different from PCs because they differentiate the products so much. It is a diminishing return to the consumers, but even when there is only one better stitch on a Dolce shirt made in Italy than the one made in China, some people will like to pay $500 more. it's really not a easy question...