SeasonalEclipse said:
Ah, the no brainer answer.
Neur0mancer said:
Vista was coming out in January and that people would upgrading their rigs so they decided to create an artifical shortage of memory ICs.
There I believe it is mostly due to expectations of consumer behavior about the time of release of Windows Vista. I would disagree with, and shall disaffirm, Neur0mancer's comment about an artificial shortage. Suppliers expect consumers to want to acquire more memory about the time of percieved release of Vista; this would induce a positive shift in supply. This alone should result with more units available at lower prices. So then why are prices rising? Neur0mancer's opinion about anartifical shortage makes an attempt to explain it. If industry collusion occurs to restrict quantity, prices will "artificially" be induced to rise.
So why my disagreement (excluding that a regular shortage may be more probable)? The change is Supply was a reaction to another change. In this case, a more significant change: the change is Demand. Demand not only positively shifts, but it also reshapes, becoming more steep. With Vista almost here consumers, believing that buying more memory would be "necessary", demanded more units of memory at all prices (positive shift in demand); prices rise. As consumers more percieve computer memory as a "need", their willingness to pay increases significantly; prices paid would increase as suppliers gauge the icreased willingness to pay.
To conclude, memory suppliers produce more units of memory at a lower cost (not directly explained above) charge higher prices for them, while the buyers are buying more units of memory at higher prices. This is a currently sweet deal for the suppliers.
This should also answer the issue of this thread.