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Message: <blockquote data-quote="Janx" data-source="post: 6264535" data-attributes="member: 8835">Let's take this example by example to show how the cost is factored into the price you the customer actually pay.  Bear in mind, I'm not talking about cost the guy had to learn his trade.  I'm talking about the opportunity cost the guy had of not working as a Cisco router guy, or a waiter, or a stripper and that he has rent and car payment.  And that he cannot work 2 jobs at the exact same time.This is a volume thing.  The theatre is selling hundred or thousands of tickets to the show.  Your $10 is a slice of paying the cost of making the show, running the show for you, and profit.  how can it not, else the people involved would go bankrupt.A taxi company pays $20K for a car they will use for 3 years.  They computer the projected volume of rides they have to give and then they charge a minimum of the price of the care divided by the number of rides.  They may get funky with mileage, but the concept is there.  you are paying for part of the taxi's cost, spread out over the lifetime of the vehicle.You aren't paying for the lessons the magician took.  You are paying for the fact that the full time magician can only work nights and weekends.  Unless he works a second job, that's the only time he can work.  therefore, in order to make $40/K of of 8 shows per week (I made that up), he has to charge $40,000 / (8 shows times 50 work weeks (holidays off)) in order to make his salary.That's $100/show btw.  Which probably is reasonable for a birthday party performance.If for some reason, $100 was above what the market is willing to bear, then the magician has a problem.  If he can't squeeze in more shows per week (and at some point, there are only so many hours in a week), then he is offering a product that isn't viable.  His next option is to lower his price, which will lower his living quality.obviously, the lower price might entice a few more customers, but like I guesstimated, there's only so many birthday parties you can book a week (likely 1 per day of the week plus a few doubles).</blockquote>

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