In this case reducing production and distribution costs would make the minimum size constraint even less binding. It is reasonable, however, to presume, that when distribution costs become low enough, demand becomes inelastic. That is, at some point the market is so saturated, with every individual in the world having copies of a particular song on every musical device he owns, that reducing the price further calls forth little if any more demand. We are also willing to argue that, for most products covered by the copyright law, this is not the case. Their demand is quite elastic and the social gains from reducing production and distribution costs of additional copies are likely to be large.
Competitive pricing achieve such reduction.
These initial copies may not command a very high premium since they purchasers know that, in a short span of time, they will also have to compete with each other, the originator, and their own customers. The radio and television industry, which have substantial sunk costs, give their products away for free. In the case of creative activity, we might wish to look at the market for art products. A signed original painting commands an enormous premium over a very good imitation. Consider that the same digital technology that lowers distribution costs, makes the sale of personalized copies quite practical.