Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : MSFT Internet Explorer vs. NSCP Navigator -- Ignore unavailable to you. Want to Upgrade?

To: Bearded One who wrote (21885)	12/2/1998 10:47:00 PM
From: Gerald R. Lampton	Read Replies (2) \| Respond to of 24154

I think the marginal cost arguments are much stronger-- If, by "marginal cost" you mean "price elasticity of demand," I think even they are not as strong as they at first appear. Assuming a low elasticity of demand (i.e., a big increase in price only causes a small reduction in demand, so that revenues increase) equals market power, it says nothing about the source of that market power. The operating system is merely a component of a total package, the personal computer. People who do not buy PC's certainly do not need PC operating systems. People who buy them do. At the same time, a PC package price that is dropping 1 or 2 percent, or even 5 percent, slower than it might otherwise will not deter many people from buying a PC (though a vendor offering prices 5 percent lower than the rest might win any given deal). A 10 percent price increase might. So the low price elasticity of demand for PC operating systems may simply be a reflection of the fact that, for the ultimate user, PC price increases have not affected demand, even though demand for the total product might be very price-elastic. what is it about Windows 95 that makes it such a premium operating system (try not to chuckle, Dan) that it costs more? I agree that Windows is not a "premium product." But try not to chuckle, either, when I raise the possibility that, when you add in support and other costs, just maybe Windows is cheaper than Linux.