Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 219.83

+1.1%

1:25 PM EST

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To: Cravey who wrote (200828)	6/7/2006 10:16:04 AM
From: Sarmad Y. Hermiz	Read Replies (1) of 275872

>> think you are confusing price with cost. If at time 0, cost was 4 and price was 10, gross margin is 60%. At time 1, cost is 2.4, and price is 6. gross margin is (6 - 2.4) / 6 = (3.6 / 6) = 60%. Maybe I'm doing the calculation wrong, but it looks like gross margin is maintained. Total profit will be maintained only if total revenue is same after price reduction as before. That implies large increase in units.

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