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05-15-2013, 02:09 PM
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Originally Posted by fysloc View Post
I think a better example that people can relate to is car purchases.

You have $25,000 for a new car. You don't care how that money is divided between government taxes/dealer fees/commission/manufacturer cut. Your goal is to get a car for $25,000 or less. Doesn't matter if theres a billion cars available to buy of the same kind, if the cost is still more than $25,000, your not getting it (until supply curve hugely beats out demand curves and the dealer just needs to get rid of it to get anything back and recover costs).

So, dealer fees could be 90% of the cost, and manufacturer 1% of the cost, meaning most money goes to the dealer, and you don't care. Its still $25,000 and thats the bottom line for your purchase regardless of what they do with that money.
So your not going to buy the new car if it costs $25,001? What about $25,002? What about $25,100? Where do you draw the line. It's pretty clear that setting an absolute limit you are willing to spend and then not going over the line is not how people in the real world operate. Even if you did stick to the 25K price they'd probably talk you into undercoating or an extended warrantee.

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