Washington Post columnist Eugene Robinson writes that Apple's decision last week to reduce the price of its iPhone would have him "hopping mad" if he had bought one when they first came out earlier this summer.
Robinson writes: "The sky-high price was supposed to guarantee a decent period of exclusivity. For a time, if you bought an iPhone, you were supposed to be the envy of your friends." He adds, "The aura of supercool should have lasted longer than a couple of months."
Robinson seems furious at Apple for making its product more affordable. Such outrage over lower prices baffles me, but economist Steven D. Levitt1 attempts to explain it. Sure, Levitt writes, it is only natural for a product to get cheaper over time as the cost of making it falls and the product itself is no longer new and in high demand. But Levitt says "consumers hate it when companies follow practices that look like they are designed to maximize profits."
Jeez, isn't maximizing profits the entire point of the company's existence to begin with? What consumer doesn't know that?
1As I've discussed, Levitt spells his name the wrong way but makes many provocative arguments.