Competition pushes prices down. Your argument wants to be: "if the marginal cost of producing software is so cheap, why don't new firms enter the market and push prices down"? Well, one, smart coders and good leadership are rare-ish and thus expensive. Two, they do, but the frontier of 'the best software' continuously expands, so there's still money to be made. Three, network effects and generally the advantages of already being big are strong (just go make your own google lmao). And four, software is so valuable that only capturing a tiny fraction of the value is still immensely profitable! When I google a wikipedia article, google serves me an ad or two that I won't click on, whereas I might've paid a few (of today's) dollars for a newspaper a hundred years ago, but times a billion people times a few thousand views ads most people don't even look at are still a lot of money.
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Notes -
Competition pushes prices down. Your argument wants to be: "if the marginal cost of producing software is so cheap, why don't new firms enter the market and push prices down"? Well, one, smart coders and good leadership are rare-ish and thus expensive. Two, they do, but the frontier of 'the best software' continuously expands, so there's still money to be made. Three, network effects and generally the advantages of already being big are strong (just go make your own google lmao). And four, software is so valuable that only capturing a tiny fraction of the value is still immensely profitable! When I google a wikipedia article, google serves me an ad or two that I won't click on, whereas I might've paid a few (of today's) dollars for a newspaper a hundred years ago, but times a billion people times a few thousand views ads most people don't even look at are still a lot of money.
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