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Friday, November 28, 2008

Interesting discussion on the economics of a low but non-zero marginal cost good. "Therefore a small drop in demand causes a huge price collapse." It's curious how different this is from music production, because music is not an undifferentiable commodity and I imagine also because there's far less competitiveness in the music market (in terms of number of firms, homogeneity of thinking, and communication between firms).


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