One thing I never understood is glasses. I’m not talking about the eye checkup or the prescription, but the actual pair of glasses. The marginal cost of a pair of glasses is very low. The actual cost of a cheap frame and the lenses probably add up to about less than $10. Depending on how many pairs of glasses people sell, the overhead shouldn’t be that much in comparison either. But “professional eye places” sell glasses for $100-$250, and “discount places” such as Wal-Mart vision center sell them for about $70.
Why is that? How is a pair of glasses different from another consumer product? Do businesses think they can increase the price because the economic demand of a pair of glasses is inelastic? People need glasses and will buy them no matter how much they cost? How come nobody locally in every area tried to undercut the prices by selling glasses for $20 and still make a profit?
Well, through globalization and Internet businesses, people CAN do that, and consumers ARE offered more choices. I don’t need a good pair of glasses; I only wear them for about 15 minutes at night watching TV before going to sleep. I found a website that sells glasses for $20 after shipping.
This makes me think globalization is on its way, high tech products will still hold their prices until the “higher tech” products come out and replace them, and the prices of cheaply manufactured products will decrease.