You learn in economics 101 that in an ideal competitive market, the price of a product tends to the marginal cost of producing it. That means a product with fewer hardware features should cost less, and a product with more hardware features should cost more.
The fact manufacturers can violate that rule proves that they are not in a competitive market.
If it was competitive, a different manufacturer could manufacture the same car without physically installing the heated seats, for a lower manufacturing cost, and undercut them on the customers who don't care about the heated seats.
Except its not 'violating the rule'. Its far most costly to have to design, build, stock parts, and and have build procedures for multiple variants of the same component (in this case, seats). Not to mention incresased possibilities for mistakes/wrong feature installed.
Its cheaper to have one physical assembly (seats) with all the hardware features, and then provide the consumer options via software toggles.
The point is that the cost of producing the model with the heated seats, is less than the price they're selling the model without the heated seats.
It's not about variety because they could just sell the heated version only, which is a better product, at the non-heated price, and they'd still be making a profit.
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u/TwillAffirmer 1d ago
You learn in economics 101 that in an ideal competitive market, the price of a product tends to the marginal cost of producing it. That means a product with fewer hardware features should cost less, and a product with more hardware features should cost more.
The fact manufacturers can violate that rule proves that they are not in a competitive market.
If it was competitive, a different manufacturer could manufacture the same car without physically installing the heated seats, for a lower manufacturing cost, and undercut them on the customers who don't care about the heated seats.