Re: Some interesting economic facts

["Matt Deatrick" <mattd@shocking.com>]

	After a market matures things tend to be fairly stable. That is why, with
some variation due to shocks(like the oil shartage in the 70's) many basic
products stay in the same price range for decades. These are competitive
markets where, essentially, the only thing left to do is fight for market
share and cut costs. OPEC is an attempt to make monopoly-like prices in a
competitive market(called a cartel- just an organized oligopoly). these
fights go back and forth but nobody ever wins becuase they are all
entrenched so deeply. Mergers and acquisitions are one way our modern
economy has found ways around this mature market phenomenon.
	Matt
----------
> From: Katharine M.J. Osborne <kosborne@rocketmail.com>
> To: Multiple recipients of list AM-INFO <am-info@essential.org>
> Subject: Re: Some interesting economic facts
> Date: Wednesday, April 22, 1998 5:33 PM
> 
> ---Mitch Stone <mstone@vc.net> wrote:
> -snip-
> > So my question is this: trading a typewriter for a word
> processing 
> > application would expect to carry a large value added.
> But shouldn't it 
> > be larger than trading one word processing application
> for another, which 
> > is mainly what we're doing today? In other words,
> shouldn't the cost of 
> > word processing applications be declining?
> > 
> >    Mitch Stone
> 
> I've never bought such an application, but I assume that
> prices are either level or increasing. I would have to
> agree that since the relative added value in these types
> of products are negligible or even superfluous that the
> cost should be declining. However, one must take into
> account that people are willing to pay a certain price
> because that's what they expect to pay. After all, when
> new models of typewriters came out over the decades their
> prices did not decine.
> 
> KaOs
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