Purchasing

Recently overheard a conversation.
Went something like this.

"I need a sink for the kitchen so I go down to the Home repair store. I talked with a store rep there and he wanted to know what I needed the sink for. I told him my old sink was bad and I needed a new one. He asked what size my kitchen was. I thought that was odd, but I told him that the kitchen was 12 feet by 8 feet."

"Ahh, then the cost of that sink is $2000."

"Geeeez... I can't afford that. Why is it so much?"

"It's based on the size of the kitchen," he says.

"That's doesn't make any sense", I say, "and I can't afford that much."

"OK, he says... how about $500?"

"Well", I say, "OK, but what was the $2000 price about?"

"That's what the pricing structure calls for, but since you can't afford it, we just lower it to the price you can afford," he said with a smile.

I was stunned. "Don't you have prices for these that are based on cost of materials, cost of delivery, overhead, profit, loss, supply, demand...?" I could see he was totally lost.

"Nope, we just charge whatever the heck we want and hope that we can make some money."

Sounds incredibly stupid to me.

However, this conversation is actually based upon one between an art buyer and a photographer.

Still sounds stupid to me.