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In capitalism, incentive usually is aligned with price. The industry doesn’t have incentive - the incentive arrives with higher prices, which is what we’re disc
by unsigner 22d ago
In capitalism, incentive usually is aligned with price. The industry doesn’t have incentive - the incentive arrives with higher prices, which is what we’re discussing in the first place.
- fauigerzigerk 22d agoI agree in general, but the market response can be very lumpy and sometimes substitution happens more quickly than investment in new capacity. Only a handful of companies can make high end memory, semiconductors and semiconductor equipment. And some of them are wary of creating overcapacity down the line. Creating new capacity takes years and creating a competitor to any of these companies takes even longer, even when the incentives (high prices) exist. So it's absolutely possible that consumers change behaviour before a sufficient supply side response arrives. Demand destruction is a market response as well.