Milton Young dot com

Raising prices to lower demand to make more money

July 22nd, 2007

Imagine you’re selling couches and you don’t know the true market value. If you advertise 20 couches for $100 each, you’ll have 100 customers lined up. What should you do?

Economic Action

Raise your prices.  You will keep the customers who were willing to pay more, and get rid of the “extra” customers.  Lowering the number of customers by raising your prices makes more money, and eases your workload of responding to potential customers.

Example: Selling 20 couches for $100 each will net you $2,000.  If 1/4 of your customers (25%) are willing will pay $200 for a couch, you’ll make twice as much.

Ideally, you want to make as much money as you can — but this is difficult because you don’t know  exactly how much a consumer is willing to pay.

Real Life Application

This can be applied towards items that you put on Craigslist. Let’s say you have an Ipod Nano that you don’t know the value of.

Imagine your post on Craigslist for $20 gets 100 responses. This is a good sign, because a lot of people want your Ipod, but you can only sell it to one and you want to make the most money you can.

Repost it for a higher amount and see how much people are willing to pay for it.  If you get no responses, play around with it until you get the number of responses you want (generally 3 or 4 for this product because not everyone who is interested will buy it).

Which LolCat are you?

July 21st, 2007

 

Your Score: Sad Cookie Cat

67% Affectionate, 46% Excitable, 71% Hungry

  You are the classic Shakespearian tragedy of the lolcat universe. The sad story of a baking a cookie, succumbing to gluttony, and in turn consuming the very cookie that was to be offered. Bad grammar ensues.

To see all possible results, checka dis.

Link: The Which Lolcat Are You? Test written by GumOtaku on OkCupid, home of the The Dating Persona Test

Could Google kill the cell phone industry?

July 20th, 2007

An article I was reading here: http://news.com.com/8301-10784_3-9747799-7.html was very well written. It seems that Google wants to acquire bandwith that is offered by the government which will make potentially free phone service availible, and this article speculates that Google will both do heavy damage to the cell phone industry as well as the online advertising industry.

How cool would it be to have free phone service? Talk all you want and pay… 0$/month — but get spammed by advertising between every call.

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