Re: It is more accurate to say supply is limited.
You are mixing concepts. Price, which is different from cost, is established when the quantity supplied is equal to the quantity demanded. As price goes up, producers offer more supply (by running extra shifts short term and building additional plant long term). As price goes down, particularly as it approaches variable cost, shifts are shortened, no new capital investment is made, and existing capital is diverted to other production.
At a given market clearing price, since the quantity demanded is dependent on the price, and that price remains high for goods that are costly to produce, it is reasonable to say that demand is limited because a given good is costly to produce.
It is, of course, equally reasonable to describe such a situation, using your term, as supply limited, and is just as appropriate a description in this case. Due to it's lack of compelling features (its performance is no better than other RAM), buyers are not willing to pay a price premium for RDRAM, and since it is more costly to produce, producers have shifted their production to other types of RAM - which matches your "supply limited" description.
Nobody's willing to pay a premium for RDRAM, which is more expensive to make than other RAM, so nobody wants to manufacture it - it doesn't really matter which end of that particular stick you pick up.
Bottom line is nobody really wants it very much, and so nobody's making very much of it.
Dan |
