This discussion just reiterates the general point that you can't make a pure price comparison between a differentiated product and one that is not. The maker of the undifferentiated product will maximize his profits when he prices it at the marginal cost of production. But the maker of a product with special desirable features will maximize his profits by pricing it above the marginal cost of production by an amount that depends on the perceived extra value, setting the price as high as possible while still leaving the buyer with some "consumer surplus."
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