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Technology Stocks : WDC, NAND, NVM, enterprise storage systems, etc.
WDC 38.20+4.1%11:26 AM EDT
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To: Art Bechhoefer who wrote (4608)3/6/2021 12:03:58 AM
From: SiliconAlley1 Recommendation

Recommended By
Mesaverde

   of 4791
 
It's not as simple as the notion that "rising prices dampens demands." That would occur if demand is elastic, meaning that it is totally dependent on changes in price. In this case it appears that demand is somewhat inelastic. It goes up even in the face of slight increases in price.

Actually, rising prices do dampen demand, but the dampened demand does not drive prices down, it just brings supply and demand in closer balance.

When demand exceeds supply, rising prices is what brings supply and demand in balance. Just like it does with stocks. Efficient markets seek to match supply at a price with demand at a price - and seeks a price where maximum widgets are traded. When demand exceeds supply, and prices rise, some demanders drop out while other are just SOL because they don't have the right connections to secure an allocation.

What matters here is that the driving force is demand, resulting in prices rising. It is not rising prices that are raising demand, though rising price can in fact increase immediate demand from purchasers wishing to stock up ahead of future price increases.
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