From mboxrd@z Thu Jan 1 00:00:00 1970 X-Spam-Checker-Version: SpamAssassin 3.4.5-pre1 (2020-06-20) on ip-172-31-74-118.ec2.internal X-Spam-Level: X-Spam-Status: No, score=-0.0 required=3.0 tests=BAYES_40 autolearn=ham autolearn_force=no version=3.4.5-pre1 Date: 1 May 93 06:55:58 GMT From: netnews!schonberg!dewar@nyu.edu (Robert Dewar) Subject: Re: Incorporating 9X into Ada courses Message-ID: List-Id: 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!