
Why cheaper computers lead to higher tuition - colinprince
http://www.washingtonpost.com/business/steven-pearlstein-why-cheaper-computers-lead-to-higher-tuition/2012/10/05/5dced2a0-0fd6-11e2-acc1-e927767f41cd_story.html
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nicholas73
At first glance it seems to explain why health care and education are
relatively more expensive, because of the cost issue, but that only explains
half of supply and demand. To the consumer (demand side), it matters not what
the cost was to the supplier. It would be almost invisible to them. If this
was truly a cost issue, then we should see demand lower as prices rise. Yet
there are more medical treatments and people in college than ever before.

The other half of the reason is that education and health care are close to a
perfectly elastic good. People will pay almost any price for it, so there was
little incentive for the supply side to reduce costs. Instead of was easier to
find ways to raise prices. The article's referenced examples of technology
being used to reduce costs shows that it was possible all along.

