Quote:
Originally Posted by Burninator
What about the cost of the design of the original beetle before being copied?
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Doesn't factor in. You, in the abstract ether, have a fixed (and unknowable at the time of design) number of buyers who will purchase the product you're designing at the price you'll end up setting for it. That will generate $X revenue. Whether you make a profit depends whether $X revenue exceeds all of your costs, including design costs.
$X is unaffected by people who are not in that fixed but unknowable number of buyers. In the Pylon example (let's assume the person desgining is the person selling and there aren't intermediaries, for the sake of simplicity), the guy who had no interest in a pink VW is not among the fixed list of prospective buyers.
There are a whole bunch of realistic factors that could weigh into this hypothetical which is why it's a terrible example. I.e., you could note that a reduced cost to the point where a particular buyer WOULD pay the reduced price (i.e. on a "what it's worth to the buyer" metric) quantifies the loss. However that assumes infinite supply of the product which is appropriate in a digital movie context but not in a manufactured product (like a pink VW bug) context.