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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Joe NYC who wrote (206491)10/14/2004 2:12:05 PM
From: tejek  Read Replies (1) | Respond to of 1574539
 
Why do you assume they only create $5 of economic value? Again, a negative assumption.

Becasue that's what market is willing to pay. A reality, rather than a negative assumption.

Only in your hypothetical world. Its not a validated case study and your conclusions are not always the case.

If you raise price, the market will buy less, losing jobs that way, causing inflation, and reducing the GNP.

That's one probable outcome.....others are:

**you raise wages, improve productivity and the product price remains the same.

**you raise wages, reduce profit margins and the product price remains the same.

**you raise wages, cut other production costs, reduce prices and sell more.

Only your alternative is the negative one.



To: Joe NYC who wrote (206491)10/14/2004 2:41:32 PM
From: SilentZ  Respond to of 1574539
 
>If you raise price, the market will buy less, losing jobs that way, causing inflation, and reducing the GNP.

That assumes that the demand for all products and services have a very high price elasticity. That isn't the case, though.

-Z


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