why does storage capacity makes such a difference in pricing devices when the difference between 128gb and 256gb SD cards is only ~10$?
In: Economics
It’s price anchoring to some extent. If presented just with the option to buy a device at $600, people might not think it’s worth the money. So you offer a ‘pro version’ at $950 and suddenly the normal version seems cheap – look at how much money you’re saving by buying that instead of the premium version!
But on a more basic economics level, offering more versions allows for matching the demand curve. There’s a basic problem with fixed prices that not everyone is willing to pay the same price for the same thing – some people value the thing more than they value their money, or vice versa. So ideally what you would do is just charge every single person the exact amount that they are willing to pay for it. In practice, you can’t do this, though. If you can offer two different prices for what is essentially the same thing from a manufacturing cost perspective, that solves the problem somewhat – people who value money less will buy the higher-priced one, and you still don’t miss out on sales to people who wouldn’t be willing to spend that much. See also: cars that are sold in various different configurations and feature sets; coupons; steam sales.
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