Governments are a corner case though. You don't get to decide, in most cases, what services you want and how much money you're going to spend for them. In many cases, the services provided are for public goods, which have wonky economics and pricing (or lack thereof) of their own. So it's fairly irrelevant to the sorts of products and things most of us work on. If you really want articles about strategic pricing, there is a lot of far more directly relevant material out there... trying to tie this into startups feels like "6 degrees of hacker news".

You don't have to go through all these contortions.

Increasing price always eventually results in less revenue. Your ability to choose has nothing to do with it. The curve holds even in forced markets.

That's the point I was making. You're asking for an exact match or nothing, which I think is a little bit on the extreme reasoning side. We don't need six degrees of hacker news, but we can't abandon power curves because it might be uncomfortable to talk about them either.

In fact, even the exceptions are interesting here. It turns out you can soak the rich, at least in narrow markets with the right positioning. What you can't do is force a generic product into a high-end market and expect similar returns.

This is all good stuff. Take out the politics and you've got a great discussion about how product positioning affects gross revenue. The item in question is simply a fixed product in a forced market. But heck, we're in that situation now with many monopolies, so it's not like government owns this particular discussion -- it's a generic discussion with government simply as one example.