why are the prices of computers decreasing when functionality is increasing?

Answer 1

The Cost of Production has decreased becuase of the increase in the volume of production. In early days if 10 computers are manufactured in a day now we can do 1000 computers in a day.

More over the technology used in production has also evolved.

Answer 2

Because of mass production (they can make and sell more), they can sell them cheaper.

If you have a store that only sells 10 items a week, you would have to make a $100 profit off each item to make $1000 a week. But if you can sell 1000 items a week, you only have to make a $1 profit off each to make $1000 a week. So the more you make and sell, the less you have to charge.

This is true not only for the whole computer, but for all the parts in it. As they sell more, they can get the processors, memory, hard drives, system boards, cases, etc for less. So building the computer becomes cheaper, and the price goes down again.

Plus the processes used to manufacturer the parts has improved to where it is cheaper ane cheaper to make the parts. The parts for a computer are considerable cheaper then they were a few years ago.

Put those all together, and the price goes down.

Answer 3

The hardware manufacturers have become more efficient and it is cheaper to make the components. It's actually more expensive to get parts for an old computer than a new computer because of the limited supply. HTH.

Answer 4

Because the costs in manufacturing said components reduces with time.

Otherwise if PC was pricved by power, given an 8086 4MHz used to cost about $3000 what would a 4GHz P4 cost now ?

Answer 5

Two answers:

It cost's $1,000,000 to make the first one, and $1 to make the millionth one.

If you don't see the product you want on the market, wait one month for someone to invent it.
If you don't like the price, wait one month.

Answer 6

Better production methods (cheaper), more competion on the market. Copying techniques from others.