Posted 5/9/2018 8:32 AM (GMT -6)
Oh criminy. Free markets vs. government price controls. An endless argument. This thread will likely get locked down pretty fast.
With some trepidation, I'll share my humble opinion.... in a free market, prices are prices. Things cost what people will pay for them. "Overpriced" is a misnomer. If something's truly overpriced, it won't sell. If it's underpriced, either the manufacturer goes under through lack of profit, or the thing is suddenly in short supply in which case the price will rise until again supply balances demand.
You may be angry that a thing costs what it does. Seems "unfair". "Why, how dare they charge that much for something I need?". Fine, don't buy it. If enough agree, the price will come down or the manufacturer won't make a profit on zero sales. Or, if you need it, buy it.
What if someone created a perfect cancer cure that cost only $1 to make, but it was an utterly perfect secret formula that couldn't be pirated? No one could reverse engineer or steal it. How much would you pay to be certainly cured of cancer? How much could someone charge for this?
What if it cost $1 billion to develop the cure, but it still could be made for $1? Amortize $1 billion development over the number of users? Now it may cost $1,000,000, but that's just financial. How much should it cost the users?
It will still cost what people will pay for it. Can I pay $1? Of course. $1000? Sure. $10,000?
Ok... $100,000? Well, maybe. $1,000,000? Nope, can't do it, few could, so couldn't sell any. Somewhere along that continuum would be the optimum price point, and a free market would settle at that price.
Aberrations happen though in distorted markets, such as when government interferes, or third-party payers like insurance companies are involved. All bets are off when that happens. In the hypothetical, I bet a government would force the manufacturer at the threat of force to provide the cure at a price the government would deem "affordable". It would "only be fair".
Oh well. Obviously "overpriced" is just one of my hot-buttons!