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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: BelowTheCrowd who wrote (171241)	9/26/2002 12:28:10 AM
From: Dan3	Read Replies (3) \| Respond to of 186894

Re:Even a complete monopolist has to set prices so as to maximize returns. You won't do that by jacking up prices so high What Intel did in the late 90's was not jack up prices, rather they stopped investing in new plant and new products but kept charging the same high prices - in a capital intensive business, this let them increase their profits considerably. Then AMD started shipping the Athlon, and Intel had to go back to working for a living. In the absence of competition from AMD, there was little or no progress in PC's, and no decrease in price. It was the sovietizing of the computer market. We were saved by Athlon, and I'm hoping we're saved again by hammer.

To: BelowTheCrowd who wrote (171241)	9/27/2002 12:22:46 AM
From: Mo Chips	Read Replies (2) \| Respond to of 186894

Re: "Even a complete monopolist has to set prices so as to maximize returns." Ever taken Econ? It all depends on the elastisity of demand. Right now, I would argue that competition is less of an issue than is demand. Prices could fall by 50% but you wouldn't see an 50% increase in demand. I think where we are now, game theory is better. If I drop my price, what does my competitor do? How does the upstream monopolist behave when the downstream industry is highly competitve and has no pricing power? Sounds like I need to read up on my pareto and nash! Study here: math.princeton.edu Also remember, the lagrangian multipler is the shadow price of the constraint!