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Upholding the first sale doctrine

Upholding the first sale doctrine

Posted Mar 22, 2013 19:32 UTC (Fri) by raven667 (subscriber, #5198)
In reply to: Upholding the first sale doctrine by lacos
Parent article: Upholding the first sale doctrine

> So you lower the prices there (practicing charity), while recovering your costs and making a profit in rich markets.

I don't believe that any industry operates by selling product at a loss in poor countries to only make a profit in rich countries, in the examples of pharma or music the product is still being sold at a profit in the poor countries, it is just sold at a much higher profit in the rich ones. The rich countries are not subsidizing the poor, profit is instead made from both, according to their ability to pay. If a customer dosen't have ability to pay, they just don't receive the product. In the pharma industry this can be rather cruel.


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Upholding the first sale doctrine

Posted Mar 24, 2013 19:08 UTC (Sun) by Jonno (subscriber, #49613) [Link]

> The rich countries are not subsidizing the poor, profit is instead made from both, according to their ability to pay.

While this is always true with regards to manufacturing cost (also known as the marginal cost, e.g. the cost of making one more item), if you include a proportional part of the development cost, the price of the product in poor countries might in fact be "below cost".

Thus, the company makes a larger profit by selling their product in poor countries at a lower prise, compared to not selling at all in those countries, but that don't mean they would make a profit if all their sales were at that price. This is what makes price discrimination (and it's enforcement) an ethically difficult issue...


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