Re: Woohooo! Dell + Linux

Celejar writes:
Doesn't basic economics dictate that given competition, the equilibrium
price is determined by both supply and demand? Even if I'm willing to pay
a great deal, if the cost to produce the item is low, competition should
drive down the price.

People who buy cheap white bread buy cheap white bread. They just want
something to stuff in the kids' mouths. Price is almost all that matters.
People who buy whole wheat bread are picky. They want bread that they
believe fits their notions about nutrition and are influenced by what their
friends say and by the labeling and advertising. Price is far from their
sole criteria: some will deliberately avoid the cheapest brand because they
believe that it must be inferior. Some will buy the most expensive brand
because "you get what you pay for" or just so they can brag.

Are you implying that the market is a monopoly or oligarchy?

No. The generic white bread market and the whole-wheat bread market are
two different markets with different elasticities. This results in
different equilibrium prices even with identical costs (which they probably
aren't). This is basic economics. Did you not study it at university?
--
John Hasler


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