Development cost amortization allows cost to get closer to selling price. This model assumes defects are randomly distributed. In 1995, it was between 0.6 to 1.2 per cm 2 . It is approximately 3.0 today. Stores add to the ASP to get their cut.
Cost goes through a number of changes before it becomes price.
In general, the fewer computers that are sold, the higher the price. Also, a decrease in volume causes cost to increase, further increasing price. Therefore, small changes in cost can have an unexpected large increase in price.