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- Newsgroups: comp.sys.ibm.pc.hardware
- Path: sparky!uunet!zaphod.mps.ohio-state.edu!wupost!cs.utexas.edu!csc.ti.com!tilde.csc.ti.com!mksol!mccall
- From: mccall@mksol.dseg.ti.com (fred j mccall 575-3539)
- Subject: Re: Why memory costs doubled
- Message-ID: <1992Dec11.212206.13458@mksol.dseg.ti.com>
- Organization: Texas Instruments Inc
- References: <9NOV199216240252@reg.triumf.ca> <23514.316923100@kiwi.gen.nz> <1992Nov13.181714.1835@dcatlas.dot.gov> <1992Nov16.220410.4258@mksol.dseg.ti.com> <1992Nov27.140153.90706@vaxc.cc.monash.edu.au> <1992Dec3.230137.13804@mksol.dseg.ti.com> <1992Dec9.210830.17470@dcatlas.dot.gov>
- Date: Fri, 11 Dec 1992 21:22:06 GMT
- Lines: 53
-
- In <1992Dec9.210830.17470@dcatlas.dot.gov> joet@dcatlas.dot.gov (Joe Trott) writes:
-
-
- >The demand for DRAM is somewhat inelastic. This means that changes in price
- >do not directly translate to equivalent changes in demand, i.e. "if you need
- >'em, you need 'em, _whatever_ the price".
-
- Do you have any evidence for this statement? It just doesn't seem to
- 'track', so far as I can tell. People will put off upgrading RAM when
- prices are high, just like they can put off any other purchase. Oh,
- sure there ARE going to be people who absolutely need to buy RAM now,
- but those people simply have a different indifference function with
- regard to money and DRAM than the folks who I tihkn make up the bulk
- of the market.
-
- >The tariffs imposed by force in the U.S. would hurt Korean sales volume,
- >because there are too many other local suppliers.
-
- Well, putting on a tariff to keep them from dumping would certainly
- reduce their sales by increasing their price in that market, but if
- demand is inelastic that wouldn't matter one iota.
-
- >Korean companies, not
- >wishing to lose too much revenue, would take advantage of the relative
- >inelasticity of demand by raising prices *everywhere* (including NZ) to
- >make up the difference.
-
- You have a logical fault here. Wouldn't their raising their prices in
- NZ, where they are not subject to a tariff, cost them market share in
- NZ? Doing this would make their situation worse, unless they could
- absolutely count on all other producers in the market to also raise
- prices, in which case there would have been no need for a tariff in
- the U.S. because they would have raised prices all by themselves.
-
- >Other manufacturers, not having to compete against
- >the lower prices, could raise theirs as well, also to everybody.
-
- Or they could leave their prices where they were, increasing market
- share as the Koreans cut their own throats in NZ by unilaterlally
- raising their price voluntarily.
-
- >In short,
- >we all (chip buyers) suffer because some non-producers initiated the use
- >of force.
-
- I think you better watch for price gouging by dealers, because your
- 'explanation' of how the market did it just doesn't make sense.
-
- --
- "Insisting on perfect safety is for people who don't have the balls to live
- in the real world." -- Mary Shafer, NASA Ames Dryden
- ------------------------------------------------------------------------------
- Fred.McCall@dseg.ti.com - I don't speak for others and they don't speak for me.
-