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Technology Stocks : Intel Corporation (INTC)

INTC 35.75

+3.6%

Nov 24 3:59 PM EST

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To: Scarecrow who wrote (56719)	6/2/1998 7:21:00 PM
From: Mo Chips	Read Replies (2) of 186894

<<Buyers would exercise the principal of marginal utility and do something else with their dollars.>> I've taken a lot of econ and I don't recall this 'principle', the words are all used in economics, but I never heard of 'exercising the principle of marginal utility.' Here's a term for you, what about the elasticity of demand? I'd say people would quit going to the NBA because the quality would be lower and given the probablity of a low slope of the demand curve (low elasticity) would find lower utility at a given price. However, at a much lower price, demand could end at the original level. To apply this to computing, computers/software/technology is not a luxury good and therefore has a much steeper demand curve (higher elasticity). In otherwords, changes in price (and one could argue) or changes in quality would not affect overall demand, especially relative to the NBA. So to reiterate my original point, Microsoft has a monopoly in a necessity item which allows it to extract a greater amount of the consumer surplus (area under the demand curve) while leveraging that power to dominate other markets. Mo

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