Tag Archives: Kiki

Supply and demand: graphics cards

http://blog.logicalincrements.com/2018/01/2018-graphics-cards-pricing-update-prices-too-damn-high/

“I do not think we can assume a rational market for cryptocurrency.” – Ms. Cuttle, in class.

This post shall explore the broader implications of that fact in recent times.

Graphics cards are important components of many computer systems, especially those used for 3D modeling, video production, and, of course, gaming. They have also proven quite cost-effective in mining certain newer types of cryptocurrency. This has caused a great number of people to buy such cards in great quantity. The number of buyers has increased, and buyers’ preferences have also changed in a manner that increases demand. Meanwhile, the supply curves remain mostly unchanged.

This has caused the prices of certain types of graphics cards to increase dramatically: For example, one type’s price has increased by 202% from its recommended retail price of $230 to $695 at the time of the article’s publication. The prices of other graphics cards have also been affected. As the optimal types’ prices rose and their availability often decreased, buyers seeking to use graphics cards for cryptocurrency mining turned to other types that were made more attractive by the elevated prices of those optimal types.  (demand determinant: price of alternatives) Meanwhile, types that are not suitable for mining but compete with mining-suited cards for buyers with different needs have also experienced demand and price increases due to increasing prices of their alternatives.

Note to the Cuttlefish: The source may not seem credible, being itself a blog. However, the events it describes have been reported in other more credible sources, which agree with it in facts. This particular source was chosen to be linked because it conveniently contains many relevant figures concentrated in a single text.

Another note to the cuttlefish: the movement on the graph was shown as upward rather than rightward because the graph made it difficult to draw the required arrow, and changing the graph to enable it (for example, by changing slopes) would make it less representative of the situation.

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