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"NEW" M6.2


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"I promised not to discuss the details outside the company."

 

You just did!

 

Is Leica's CEO a personal friend of yours Sal? You seem to be the only person on any Leica forum that claims they got to chat to him at Photokina. Frankly the Canon / Nikon mount lens claim doesnt seem to work for me either sorry, given the many obscure lens manufacturers that churn out lenses in these mounts.

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<i>

This may be a shock, but what goes into 99.999 percent of the products "out there" has absolutely nothing to do with what they sell for.

</i>

<p>

Actually, costs have at least something to do with the selling price of 100% of products.

<p>

<i>

The market controls the selling price

</i>

<p>

And the market consists of both manufacturers and consumers, and price is determined by the intersection of their supply and demand curves. The manufacturer's supply curve is determined by costs.

<p>

Specifically, if Leica could reduce their production costs, they could:

<ul>

<li>a) sell the same number of units at greater profit per unit

<li>b) pass the savings along to the consumer and sell more units at the same per-unit profit

<li>c) pass some of the savings along, selling somewhat more units at a somewhat higher profit per unit.

</ul>

<p>

The optimum in terms of total profit maximization turns out to be some version of option c.

<p>

Of course, this is theory and in the real world there are a lot of soft issues that go into pricing. Nonetheless, the point is valid that lowering costs usually does result in an economic incentive to pass some of those savings on to consumers.

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