maxleresistant said:
sc94597 said:
The equilibrium prices of a particular good have nothing to do with inflation. Inflation is caused by the expansion of the money-supply (the value of the dollar and its purchasing power decreases.) That any set of similar goods might decrease in nominal price over time doesn't discount that the real value of the dollar is less than it was, because there are more of them in supply. When you spend dollars you are inducing an opportunity cost from not being able to spend that money on a composite good. So yes, inflation does matter, even if the prices of electronics are decreasing. Money doesn't have a different value just because you are buying electronics.
Also real median income (meaning it is inflation adjusted) is almost back to 2007 levels (where it peaked) and is well above 2008 levels (when the Wii was still being sold for $250 AND the great recession started.)
https://fred.stlouisfed.org/series/MEHOINUSA672N
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Ok then, thank you for these arguments that are proving my point.
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I am interested in how you think that. You stated that the real median income is not equivalent to that in 2006 (by implying that median income hasn't kept up with inflation), but the data I linked from the St Louis Federal Reserve says otherwise. I didn't make any claim about the supply and demand curves of the Switch (none of us can really predict it), but the argument that the high price (which really isn't that high) necessarily means it will fail is ridiculous. The WIi was a much weaker console with respect to its competitors, and its price was comparable when all other factors are adjusted. It isn't power (alone) which determine the collection of individual values (which we call a demand curve) and therefore the ideal price of a console does not solely correlate with its power.
