Products and services are priced according to what people are willing to pay. That's all.

Starbucks charges $4.50 for a cup of coffee because people are willing to pay $4.50. If people were willing to give them $7.50 then that's what the price would be.

Alex Rodriguez got a contract for $165 million dollars because the team was willing to pay him that much. People were unwilling to buy pies from Martha Stewart for $5 but when she raised the price of the same pie to $15 she sold out.


-Tim-