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Many new products, like the successive generations of pocket
calculators, are very expensive when they first appear on the market;
then, over a period of time the price declines. Similarly, new books
often appear first in hardcover and later as less expensive paperbacks.
Although-in some cases the falling price can be attributed to such
factors as decreasing production costs or the introduction of tom-
peting products, in other cases it appears to be, at least in part, for the purpose of exploiting differences in consumers' reservation prices.
That is, some of the price cuts appear to be for the purpose of price
discriminating.