SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Pastimes : Clown-Free Zone... sorry, no clowns allowed
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: PMG who wrote (115849)8/7/2001 11:19:29 AM
From: Don Lloyd  Read Replies (1) of 436258
 
PMG -

Thinking about it, our reasoning has not been totally complete... we forgot that productivity through lower prices gives more buying power to the consumer which in turn is what makes growth possible. ...

No, I didn't forget about it at all. The issue comes down to whether the decrease in prices is offset by an increase in unit volume as it would be if the demand is price elastic before the price decrease. In the case of highly competitive products, the price will usually be driven down to the point where the demand is highly price inelastic (little or even negative increase in revenues for large reductions in price, on a percentage basis). In the limit, any product that experiences sufficiently large reductions in price effectively drops out of economic significance as its disappearing revenues can neither support wages nor profits. However, this doesn't mean that the product doesn't provide satisfaction to its consumers, and it allows
them to spend the released purchase funds on other products.

Regards, Don
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News