A music producer turned scholar proposes Canada create a system of 5 cents/song download prices, boosted by revenue from sales taxes. Whether you think this plan has merit or not, the reporter relates a very illustrative comment from "another record-industry type": "Why not charge 10 cents, instead of 5, and double the revenue?"

Anyone who has taken basic economics knows that demand curves are downward sloping - the higher the price, the lower the quantity sold. So fewer songs would be sold at 10 cents instead of 5. Except the music industry seems to think that demand for music is very nearly inelastic, and therefore they should simply charge as high a price as their customers can bear. Only monopolists can actually do this. And as a consequence, the reputation of the record companies continues to sink, people do buy less music over time (since the demand isn't so inelastic in the long run), and the industry blames filesharing.

A little grasp of basic economics could go a long way.