[OPE-L:924] Re: evaulation of inputs and moral depreciation

Allin Cottrell (cottrell@wfu.edu)
Thu, 1 Feb 1996 19:01:43 -0800

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Paul C:

> Further, it is possible for moral depreciation to be associated
> in practice with an increase in the value of the means of
> production necessary to stay in production. This is certainly
> the case with semiconductors. New generations of chip fab lines
> depreciate the old ones before they are worn out, and are at
> the same time much more expensive than the old ones.

Isn't this a case of economies of scale? The new chip fab lines
may be more expensive than the old ones -- but surely they are
not more expensive on a per-chip basis? (Or if so, this is
associated with a more than proportionate increase in the
functionality of the chips.) No?

Allin Cottrell
Department of Economics
Wake Forest University