It would be the way I'd do it yes but do you see many oil companies slashing prices to get more sales? Not likely. Then again, the individual gas stations do that. Then again, oil and computers are totally unrelated. So in conclusion, the above statement is a waste of time. Thank you.
Yes, but the Oil companys cant just manufacture more oil, can they. Their assets get smaller every time they sell a barrel, and once the oil's gone, its gone. Also, time and time again Intel has had dramatic price cuts on their CPUs after the first few months. They practically halved the price of the Q6600 over the space of a few months after release.
it's an economic fact, intel is a profit seeking company and to maximize their profits on a chip that costs them $20-30 to make, they will slash their per item profits in half if that means that they can sell 3 times as many. but they still want to make money from the early adopters, those who are willing to pay the big bucks for something good now, so they do initially price higher, no reason not to, it just means they have the rest of the market wait a few months before they then get their money. look at it this way, my e6400 cost me something like $240 a bit over two years ago. http://www.newegg.com/Product/Product.aspx...N82E16819116072 the e5200 is now a superior product for a third the cost [/b][/quote] It would be the way I'd do it yes but do you see many oil companies slashing prices to get more sales? Not likely. Then again, the individual gas stations do that. Then again, oil and computers are totally unrelated. So in conclusion, the above statement is a waste of time. Thank you. [/b][/quote] that's because oil is of limited supply and is not renewable. Unlike sand which we have a near infinite amount of... also OPEC acts as a monopoly. monopolies restrict supply artificially(which opec does)and then prices higher. A majority of these firms expenses come from surverying, drilling and refining and all those scale roughly with the volume of the product we're getting so we're probably paying 5-30% more for oil than it's worth. big wow, an extra 10 cents a gallon... intel on the other hand deals with silicon http://en.wikipedia.org/wiki/Silicon which is apparently VERY common. most of their expenses come from designing chips and building foundries. It costs them within 5% to make 1 single chip as it does for them to make 20million. guess which is more profitable? We're talking about economies of scale here. That first chip might have cost them $3-10billion to make, but the following chips only cost them around 20 bucks. It's in their best interest to move volume. THEY HAVE TO MOVE A HIGH VOLUME of goods, otherwise they wouldn't be able to stay in business. and this my friends is why you should never allow politicians and people who never took econ101 to talk about business. and here is the amazing part, the IT industry follows closely most free market economic theories. As R&D costs raise, there are supposed to be fewer firms in a market as to avoid redundancy of costs(remember though that large firms are inherently less efficient than smaller firms, so in cases where R&D costs are lower it's more efficient to have many smaller competing firms coming out with multiple designs for the same thing) Right now intel is paying big bucks to be the best. They're making a lot of money at it too, but they're also pouring in A LOT of money and really pushing the boundaries of what is possible(while maintaining reasonable yields) this is what we want, an efficient market which is highly competative. I'd dare to argue that today's semi monopolistic market is more effective than if we had a quadropoly or something similar, simply due to the tremendous research costs involved(either that or you'd end up with multiple firms working VERY closely together to the point where they might as well be merged which gets you where we are anyway) now some might say, but wait intel isn't the only semiconductor company out there... yes that's true, but IBM, AMD, TSMC and the like are all 1-3 years behind intel at the manufacturing level and at the design level, they're putting in FAR less money. They are effectively making niche products, while intel makes a jack of all trades product which competes well in a large number of niches too. Cell sucks for general use, but it is excellent for certain scientific uses. We all know phenom is a failure on the desktop, but it's still pretty good for a number of server related tasks... its not a monopoly of the whole IC industry here, intel just has a VERY strong grasp on the desktop and laptop markets.
