It is well known that it is no use putting the price that we want in the products, that is, a value enough to cover the costs plus a profitability because we run the risk of not having demand.
So, what are the factors that determine the pricing of products?
In 2007, Radiohead released 'In Rainbows' via their own website as a Pay-What-You-Want download, thus allowing fans to price the album as they saw fit. Radiohead's pay-what-you-want approach did not make the album worthless: reportedly, the band made more money out of 'In Rainbows' than out of all the other albums they had released through a record label.
PS: Pay-What-You-Want pricing has long existed on the margins of the economy—notably in the form of tips to waiters and street performers as well as donations to charities—but seems to be gaining interest as the earlier example suggests.
Walras' classic response of scarcity and utility seems like it still generally applies.
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