With the euro so low. How come we do not see a price drops for imported phones

I believe that the Concerto was $740.00, when it was first introduced, now its $680.00.  Plus, no one has to lower there prices.  I just guess that some will and some will not.

The market is hedged.  It happens across many industries where there is incentive to have a dealer network.  Check out how Porsche regulates things...they are more accurately a bank that sells autos than an automaker, per se.

Quote:

Originally Posted by John2e 

I am not an ecconomist but it would be logical that a drop in th euro against the dollar would mean a reduction in cost for the ED 8 and Senn HD-800

The way that Senn dictate to there dealers means you will be waiting a long time for a price drop.

There is a microeconomic theory which states that when costs rise, prices rise - but when costs decline, prices tend to stagnate

it's been several years since i've studied this material, so I couldnt explain the reasoning behind this phenomenon

Quote:

Originally Posted by El_Doug 

There is a microeconomic theory which states that when costs rise, prices rise - but when costs decline, prices tend to stagnate

 

it's been several years since i've studied this material, so I couldnt explain the reasoning behind this phenomenon

Just a total stab in the dark here, but because profits increase and companies like that 

A lot of it probably doesn't have to do with Macroeconomic theory per se, but it probably takes time for price drops to dribble down down the chain... First the manufacturer has to cut its price, then maybe the US/wherever importer or dealer, then the retailer. It could also be economic inefficiency or psychology, people have a easy time demanding more money but it's harder to accept charging less for the same thing, and prices have to be cut 2-3 times across the chain. Currency hedges might as play a role.  

Just a few guesses. 

Quote:

Originally Posted by Ypoknons 

A lot of it probably doesn't have to do with Macroeconomic theory per se, but it probably takes time for price drops to dribble down down the chain... First the manufacturer has to cut its price, then maybe the US/wherever importer or dealer, then the retailer. It could also be economic inefficiency or psychology, people have a easy time demanding more money but it's harder to accept charging less for the same thing, and prices have to be cut 2-3 times across the chain. Currency hedges might as play a role.  

 

Just a few guesses. 

Price stickiness. Yep, that's definitely one of the reasons. Also menu costs probably factor in.

The leisure mindset of the market probably helps and hurts. The target consumer for the $1000+ headphones usually doesn't care much if the price stays the same or drops, not initially. But, because of what I imagine is an elastic demand, once prices do start falling they fall across the board and everyone's gotta make cuts to stay competitive. Except for niche markets like high-end custom in-ears and such.

Quote:

Originally Posted by Head Injury 

Price stickiness. Yep, that's definitely one of the reasons. Also menu costs probably factor in.

 

The leisure mindset of the market probably helps and hurts. The target consumer for the $1000+ headphones usually doesn't care much if the price stays the same or drops, not initially. But, because of what I imagine is an elastic demand, once prices do start falling they fall across the board and everyone's gotta make cuts to stay competitive. Except for niche markets like high-end custom in-ears and such.

This, I think, is the primary explanation. The primary population that makes up the market looking at $500+ dollar headphones is relatively unlikely to change their demand because of drops in the Euro or Dollar. If they could afford it before, they'll probably still be able to afford it now at the same price. At least, that's likely what the manufactures and distributors will be counting on.

bear in mind with all the reasons above, another reason why this occurs is because the shops have bought the items prior to the drop so they will wish to get rid the stock at the same margin, then they might drop the price after. That's what happens with petrol prices in Australia in theory and also with phones here, though the resident headphone shop here doesn't do that, but I know that one of our online stores does this.

they have to sell whatever they got at a certain price for another price to maintain profit margins. if they keep the price up after the stock is gone, which we won't know unless we work there, then it is for the profit margin. but the argument that the hifi community isn't the biggest and the market knows they will continue to pay and the increase in consumers with a price drop is negligible so monetary economics wise, it doesn't make much practical sense to introduce a price drop either.

The price of goods is not now or ever was based on the cost of production.  It is based on "what the market will bear."