College students could once buy a computer at a substantial discount through a campus buying program.The discounts largely disappeared in the late 1990s, when PC companies dropped their prices. “The industry’s margins just got too thin to allow for those [college discounts],” said the president of Educause, a group that promotes and surveys using technology on campus (David LaGesse, “A PC Choice: Dorm or Quad?” U.S. News & World Report, May 5, 2003, 64). Using the concepts and terminology discussed in this chapter, explain why shrinking profit margins are associated with the reduction or elimination of student discounts.
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