Arnold Kling

Printer and Cartridge Pricing

Arnold Kling, Great Questions of Economics
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Did you ever wonder why printers are cheap and replacement cartridges are expensive? Zimran Ahmed explains that the answer is price discrimination.

toner usage is a good way to price discriminate between heavy users and light users, and charge heavy users more because they're willing to pay more. If you take away the ability to price discriminate, toner prices will fall and printer prices will rise. This is an unalloyed good for heavy users, but makes life worse for light users.

Discussion Question. What happens if a competitor is able to sell compatible cartridges?

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