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They just shouldn't do that. If they can afford to sell the Ferrari for $20k, they should do so. To everyone who wants one, for whatever reason.

by Xymist 2y ago

renewiltord 2y ago
Nah, no thanks. I prefer this because I now have some damned fast GPUs in a rig on the cheap. I’m happy to have my $20k acceleration limited Ferrari.
danbruc 2y ago
That is why we need competition, to drive the price down towards the costs. And you must be able to provide enough volume to meet demand.
jtbayly 2y ago
They would not be able to afford to sell them at that price if they sold all of them at that price. (Or at least, I doubt they would.)
bilbo0s 2y ago
The danger, of course, is that they decide that they don't believe they can sell a single sku at USD20000 and make the same money they're making now. So then, the price goes up 2.5x to 10x depending on how greedy they want to be.
akoboldfrying 2y ago
I disagree, and this line of thinking is positively dangerous. Just because Ferrari might be capable of making that car for $20k, I don't have a fundamental right to demand it from them any more than I have a fundamental right to demand that you make me a sandwich right now for $5. > they can afford Before using the word "they" in a prescriptive sentence, think about whether you could substitute "I" and you would still be happy with it.
- Retric 2y ago
  The goal isn’t to directly force them, but to create a market competitive enough that the only way to compete is to sell the best product they can with a minimal markup. I have no issue selling into a competitive market, that’s just how things work for individuals. It’s only at the scale of countries and giant companies that the ability for anti competitive behavior really shows up.
- modeless 2y ago
  There's no fundamental right. But wishing for competition is certainly reasonable! We should all be rooting for competition to improve the efficiency of our markets.
Wytwwww 2y ago
So company profit margins should be capped? At what level and how would that work exactly? What about all other stuff? i.e. maybe you or somebody else can "afford" to sell their labour at 10-80% of what they are paid?
- Sabinus 2y ago
  If NVIDIA had real competition they would do this naturally to gain market share. The GP saying they 'should' do x isn't something we can expect companies to do out of the goodness of their hearts, it's what the market should force them to do.
  - Wytwwww 2y ago
    I'm not sure if everything turning into a commodity and no companies having any surpluses would be ideal either. That would probably significantly slow down innovation in some ways.
  - Jlagreen 2y ago
    No, they wouldn't. Nvidia focuses more on premium and margin than on unit share. Nvidia looks at Apple. Apple has 75% of profit share with 25% of unit share of the whole smartphone market. Apple makes 3x more profit than all other smartphone makers combined. Why should Apple reduce pricing in such a situation?
- dragonwriter 2y ago
  > So company profit margins should be capped? At what level and how would that work exactly? That a competitive market drives prices to zero economic profit is a fairly basic result; no active measures besides the existence of competition are necessary for this. > What about all other stuff? Yes, this applies in all competitive markets. If it doesn't apply in a market, there is a constraint on competition causing it.
  - Wytwwww 2y ago
    > prices to zero economic profit is a fairly basic result Yes and that's not necessarily a good thing in all markets. Very low profit margins can result in less innovations and would certainly discourage companies from taking risks (basically by definition)
tester756 2y ago
So, are you going to tell your boss to decrease your salary to the level where it covers just your basic needs and no more?
- brokenmachine 2y ago
  That is precisely what would happen if there was infinite competition for job openings.

They just shouldn't do that. If they can afford to sell the Ferrari for $20k, they should do so. To everyone who wants one, for whatever reason.

by Xymist 2y ago

They just shouldn't do that. If they can afford to sell the Ferrari for $20k, they should do so. To everyone who wants one, for whatever reason.

renewiltord 2y ago

Nah, no thanks. I prefer this because I now have some damned fast GPUs in a rig on the cheap. I’m happy to have my $20k acceleration limited Ferrari.

danbruc 2y ago

That is why we need competition, to drive the price down towards the costs. And you must be able to provide enough volume to meet demand.

jtbayly 2y ago

They would not be able to afford to sell them at that price if they sold all of them at that price. (Or at least, I doubt they would.)

bilbo0s 2y ago

The danger, of course, is that they decide that they don't believe they can sell a single sku at USD20000 and make the same money they're making now. So then, the price goes up 2.5x to 10x depending on how greedy they want to be.

akoboldfrying 2y ago

I disagree, and this line of thinking is positively dangerous. Just because Ferrari might be capable of making that car for $20k, I don't have a fundamental right to demand it from them any more than I have a fundamental right to demand that you make me a sandwich right now for $5. > they can afford Before using the word "they" in a prescriptive sentence, think about whether you could substitute "I" and you would still be happy with it.

Retric 2y ago
The goal isn’t to directly force them, but to create a market competitive enough that the only way to compete is to sell the best product they can with a minimal markup. I have no issue selling into a competitive market, that’s just how things work for individuals. It’s only at the scale of countries and giant companies that the ability for anti competitive behavior really shows up.
modeless 2y ago
There's no fundamental right. But wishing for competition is certainly reasonable! We should all be rooting for competition to improve the efficiency of our markets.

Wytwwww 2y ago

So company profit margins should be capped? At what level and how would that work exactly? What about all other stuff? i.e. maybe you or somebody else can "afford" to sell their labour at 10-80% of what they are paid?

Sabinus 2y ago
If NVIDIA had real competition they would do this naturally to gain market share. The GP saying they 'should' do x isn't something we can expect companies to do out of the goodness of their hearts, it's what the market should force them to do.
- Wytwwww 2y ago
  I'm not sure if everything turning into a commodity and no companies having any surpluses would be ideal either. That would probably significantly slow down innovation in some ways.
- Jlagreen 2y ago
  No, they wouldn't. Nvidia focuses more on premium and margin than on unit share. Nvidia looks at Apple. Apple has 75% of profit share with 25% of unit share of the whole smartphone market. Apple makes 3x more profit than all other smartphone makers combined. Why should Apple reduce pricing in such a situation?
dragonwriter 2y ago
> So company profit margins should be capped? At what level and how would that work exactly? That a competitive market drives prices to zero economic profit is a fairly basic result; no active measures besides the existence of competition are necessary for this. > What about all other stuff? Yes, this applies in all competitive markets. If it doesn't apply in a market, there is a constraint on competition causing it.
- Wytwwww 2y ago
  > prices to zero economic profit is a fairly basic result Yes and that's not necessarily a good thing in all markets. Very low profit margins can result in less innovations and would certainly discourage companies from taking risks (basically by definition)

tester756 2y ago

So, are you going to tell your boss to decrease your salary to the level where it covers just your basic needs and no more?

brokenmachine 2y ago
That is precisely what would happen if there was infinite competition for job openings.