Where Prices Come From(2017)
The software industry is the leading example in the economy where revenue depends on the cost of developing a product capable of satisfying many requirements desired by potential customers but does not incur a cost that rises with the number of buyers. Marginal cost is zero. Revenue can increase without increasing the inputs responsible for variable cost, including employment. This explains why inputs in the software industry do not match its growing size.
- JEL D4 Market Structure and Pricing,
- O4 Economic Growth,
- C71 Cooperative Games
Publication DateSeptember 4, 2017
Citation Informationlumpy cost, empty core, cooperative games,