And so, we're in a wonderful situation with electricity in the rich world.

It has been made possible, by the way, for certain other different reasons.

So if you expect if before you thought prices were going to be roughly constant, and now you expect them to go down, now you are gonna say wow,

It's not about low cost.

Look, Pat, First Rate got that contract fair and square.

If prices go down a little bit, it doesn't affect people's behavior in aggregate.

Because you're getting the same earnings for a lower price.

And this is very relevant to what's going on in the world today.

And then they would take a loss.

So, I went online again and I looked at what an optimal sensor would look like.

Ninety nine pence was the starting price and no reserve.

And this comes back to what we talked about in the last video.

Price to Earnings, all else equal and that's a big thing all else equal, the lower the Price to Earnings, you're paying less for something.

You know what happens at that point?

Southwest took on the airline industry by bringing up the traditional hub and spoke model and providing just very limited services but for an extremely low price.

And you can imagine the other way, if the Kindle's price went down, then that would shift my demand curve to the right.

I'm going to make money that I otherwise wouldn't have made.

Software can do it faster.

And the cost of a transistor cycle, which is a measure of the price performance of electronics, comes down about every year.

I believe we should try more things that have a potential to be far less expensive.

I love Lego Mindstorm, is which a wonderful way to experiment with these things.

And that's the real big take away I wanted you to get at, is that high utilization of anything, of our aggregate capacity, prices will increase.

We're not selling the car.

Stock prices plunged to a record low.

And frankly, if there was a bunch of lemonade stands, everyone is trying to sell their capacity.

Low Price to Earnings ratio implies that it's cheaper.

We've been talking about the law of demand and how if we hold all else equal, a change in price, price goes up, the quantity demanded goes down and the price goes down, the quantity demanded goes up.

The penny drops.

If consumption drops like this, we have all of this capacity and prices go down.

And you're going to pay a lower Price to Earnings ratio if the company isn't growing.

How could you have prices that kind of move?

And by 2008 we had seen nearly a decade in which families struggled with costs that kept rising, the paychecks that didn't.

They want to encourage high volume purchases, and so they have stepped pricing that is oriented to create volume.

It's a fantastic device that we want to get in the hands of as many people as we can.

It's the best price that someone's willing to give you for something.

And the Space Shuttle was going to solve those problems.

The quantity demanded will go down, and you can imagine the other side of that.

And we see that the last trade here was for 2.58.

Or, God forbid, if housing prices actually go down.

I could actually price on specific customer segments or on features I know they need.

And almost the same happens here.

Now the whole purpose of this, it does increase demand for treasuries, and therefore increase the price on treasuries, and lower the interest rate, but the main point is is it takes this printed money and it puts it in the banking system.

And, just you know, the stimulus plan, the whole idea about it is, the government doesn't want us to enter into a deflationary spiral.

If you were a monopoly, if Sal's Cupcakes were the only guy in town, he could just keep his prices high.

Now in the next year maybe there's, whatever, demand for avocados goes down or whatever and people pay less for it.