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Technology Stocks : Dell Technologies Inc.

DELL 124.39

-7.0%

10:40 AM EST

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To: Skeeter Bug who wrote (95219)	2/5/1999 3:02:00 PM
From: Chuzzlewit	Read Replies (1) of 176387

Skeeter Bug, you said: au contraire, mon frere. falling prices have to do with demand. the weaker the demand, the more prices fall. BASIC ECONOMICS. True, but if you turn the page in your economics text book you will find that firms are profit maximizers. That means that decreasing prices can stimulate demand and increase profits (elasticity of demand is the key here). This has proven to be true in technology. The part that you are missing is that technology is not a static commodity. Oil is static; gold is static. A bbl of oil today is much like a bbl of oil will be five years from now -- the same is true of gold. But CPUs and computers and software are dynamic. You probably would have a hard time selling today's chips at 10% of their current prices five years from now. Lower prices create greater demand which allows component manufacturers to to lower their costs through greater efficiencies in production methodologies which allows reduction in costs to create greater technology profits which coincidentally increases demand which ... TTFN, CTC

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