Re: Incorporating 9X into Ada courses

[netnews!schonberg!dewar@nyu.edu (Robert Dewar)]

I must say I find Feldman's comment on Ada pricing naive. All this talk of
gouging tax payers reads well as rabble rousing to the gallery, but does it
really make sense?

The issue that faces an Ada company is where to price its products in a market
whose elasticity is not known, but which is suspected to be much less than 1
(i.e. halving prices will not as much as double sales), and of course in 
practice the elasticity must be much greater than 1 if halving the price is
to leave profits stable, let alone growing.

As you know, a fair number of people have lost a lot of money betting on the
Ada market. Now it may be that Ada companies have got the sums wrong, and that
they would make more money if they reduced prices.

However, when Mike says that "if an Ada company reduced prices and it didn't
work they would lose the ability to gouge the taxpayers" he has got it 
completely wrong. On the contrary, the penalty for such a misstep would almost
certainly be that the company would fail. 

As it is, several Ada companies have in effect failed (Alsys, Telesoft,
Systeam), and certainly no one is getting rich in the Ada business. In a 
situation where everyone is losing money, or at best not making much money,
it is rather absurd to make accusations of venality. One can accuse Ada
companies of making the wrong choices -- Mike has gone of on this thetorical
tact quite effectively in the past -- but it seems silly to accuse someone of
price gouging when they are losing money!

How elastic is the Ada market? If you really believe the elasticity is
greater than 1, and that hence it would benefit Ada companies to reduce
prices, then concentrate on that point, and save the accusatory approach
for a situation in which it is more appropriate!