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    #1

    balance

    The following sentence in red is confusing. Balance between what and what? Would you please paraphrase it more easily?

    Companies or creators ... tried to squeeze prices down while maintaining their profit margins. They had to find the single price that would balance what the market would bear with the economies of scale they could achieve in production to deliver the highest profit. Now companies and creators are instead having to think about how they can allow users to experience what they have for free, while letting their biggest fans spend lots of money on things they value.

    Thank you.

  1. MikeNewYork's Avatar
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    #2

    Re: balance

    Quote Originally Posted by unpakwon View Post
    The following sentence in red is confusing. Balance between what and what? Would you please paraphrase it more easily?

    Companies or creators ... tried to squeeze prices down while maintaining their profit margins. They had to find the single price that would balance what the market would bear with the economies of scale they could achieve in production to deliver the highest profit. Now companies and creators are instead having to think about how they can allow users to experience what they have for free, while letting their biggest fans spend lots of money on things they value.

    Thank you.
    The balance here is between the selling price of an item and the number of those items that the company can produce.

    If the price goes up, demand will go down, but the extra money made from each sale may overcome the drop in sales. If the price goes down, demand will increase. If the company can increase production to match demand, then increased sales may overcome making less money on each sale.

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