"..for production costs to fall, either there must be fewer people earning wages, or wages must be lower." Prices can go down without production or labor costs

"..for production costs to fall, either there must be fewer people earning wages, or wages must be lower." Prices can go down without production or labor costs falling. Equipment is frequently capitalized. The approach that CFOs take to applying both the payments (interest) and depreciation are valves they can turn to modulate the P&L. This is totally disconnected from supply, demand and pricing. Moreover, the margins earned can be very high at the beginning of a product cycle and therefore, still robust enough to justify the investment and labor costs even when prices have dropped. Finally, in many cases, the lower prices induce more demand. Average selling price drops, demand grows, offsetting the price decrease. This is all modus operandi for the display, semiconductor and computing industries, among others.