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Technology Stocks : Dell Technologies Inc.

DELL 126.27

-0.1%

11:45 AM EST

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To: Diamond Jim who wrote (53239)	7/22/1998 5:11:00 PM
From: Chuzzlewit	Read Replies (2) of 176387

James, declining ASPs is one of the truly silly arguments bandied about! The thing that hurt Intel was the fact that AMD and Cyrix had credible offerings at the low end. So when companies like Compaq decided to use those chips instead of Intel demad decreased. Decrease in demand causes prices to fall. Intel was surprised at the strong response that AMD and Cyrix received in the marketplace and had excess inventory. Excess inventory cause prices to fall. Prices also fall for other reasons. Prices fall because of shifts in elasticity of demand and drops in manufacturing costs. Economics teaches most of us (excepting those that insist on focusing on ASPs) that firms are profit maximizers. That can often be the result of dropping prices. That's why marketing firms spend so much money trying to find the proper "price point" of their product. I am really getting sick to death of this point. TTFN, CTC

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