(the least economically literate) thinking that there is, in some warehouse, a large stock of memory chips to be purchased at a predetermined price," I suspect the least economically literate are confused about opportunity cost(s) also. If quantity demanded is reduced by an increase of price, ceteris paribus, the owner of a large stock of memory chips has incurred an opportunity cost by waiting for their "predetermined price." To wit. (predetermined price) > (market price of chips). If the chips owner brings his/her chips to market, the supply curve will shift down and to the left, lowering the price of those heretofore sequestered units. Of course, I could be mistaken.
David: Your comment makes me discover that my sentence "the price of Apple devices will rise and their quantity demanded will decrease" is very confusing. (I may correct it later, thanks to you.) To the extent that Apple buys on a "perfectly competitive" input market (which is probably the case), it is its marginal cost curve that will shift left. This will reduce its production, except if the market prices of all electronic devices increase enough to compensate (inelastic market demand.
This being said, the quantity demanded of chips cannot be reduced by an increase in chip price caused by an increase in demand, except if we measure the quantity demanded on the NEW demand curve. Consequently, anybody who would have previously hoarded memory chips would have incentives to sell now (except if he thinks that prices are going to rise still more). The opportunity cost of keeping a hoarded stock is what could be earned by selling now. As you say, if he does sell, this means that the market supply will increase, limiting the price increase. This speculation (buy low, sell high) smooths the increase in prices over time. (My "predetermined" price is only designed to illustrate an unrealistic situation where current prices exert no influence; this is potentially confusing.) Did I miss something?
Did I miss something? No you didn't. My assumption was the "predetermined price" was to illustrate your point. Sorry for any confusion I may have caused.
(the least economically literate) thinking that there is, in some warehouse, a large stock of memory chips to be purchased at a predetermined price," I suspect the least economically literate are confused about opportunity cost(s) also. If quantity demanded is reduced by an increase of price, ceteris paribus, the owner of a large stock of memory chips has incurred an opportunity cost by waiting for their "predetermined price." To wit. (predetermined price) > (market price of chips). If the chips owner brings his/her chips to market, the supply curve will shift down and to the left, lowering the price of those heretofore sequestered units. Of course, I could be mistaken.
David: Your comment makes me discover that my sentence "the price of Apple devices will rise and their quantity demanded will decrease" is very confusing. (I may correct it later, thanks to you.) To the extent that Apple buys on a "perfectly competitive" input market (which is probably the case), it is its marginal cost curve that will shift left. This will reduce its production, except if the market prices of all electronic devices increase enough to compensate (inelastic market demand.
This being said, the quantity demanded of chips cannot be reduced by an increase in chip price caused by an increase in demand, except if we measure the quantity demanded on the NEW demand curve. Consequently, anybody who would have previously hoarded memory chips would have incentives to sell now (except if he thinks that prices are going to rise still more). The opportunity cost of keeping a hoarded stock is what could be earned by selling now. As you say, if he does sell, this means that the market supply will increase, limiting the price increase. This speculation (buy low, sell high) smooths the increase in prices over time. (My "predetermined" price is only designed to illustrate an unrealistic situation where current prices exert no influence; this is potentially confusing.) Did I miss something?
Did I miss something? No you didn't. My assumption was the "predetermined price" was to illustrate your point. Sorry for any confusion I may have caused.
No excuse necessary, David. I hesitated a bit before publishing this post, which I did not find clear enough!