alt Hacker NewsIf you can only manufacture 1,000 widgets per year, and there is demand, then you want to sell all 1,000 at the highest price possible.
If you have the ability to produce infinite widgets, then you produce to maximize the supply/demand curve in Econ 101 and reach that equilibrium spot with the spherical cows.
Nvidia had fixed supply, so of course they want as high a price as possible.
Exactly. For the sake of simplicity, let's assume one person buys one widget. That means having 2,000 people willing to buy 1,000 widgets (demand exceeds supply) is not the best situation for a business. Better is to push the price higher until only 1,000 willing buyers for 1,000 widgets remain (supply meets demand). If you can do that, you can't have a shortage.
Having 2,000 willing buyers for 1,000 widgets means you are leaving money on the table. As is obvious if you've ever been to a live action, not all potential buyers will "nope, I'm out" at the exact same price-point. With 2,000 willing buyers for 1,000 widgets there is room for the price to go higher.
If it is true that Jensen manufactured a shortage, where demand exceeds supply, the getting locked into a 2,000 buyers for 1,000 widgets scenario, then the earlier commenter has it right: revenue was not maximized. However, the likelihood of Jensen doing such a thing is highly unlikely. What would be the motivation? While it is technically possible for vendors to setup a shortage situation, in the real world shortages typically only happen when the government gets involved (e.g. price gouging laws). Usually vendors want to see the price rise.