Post #25617 by albaby1 on the US Policy board

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I would argue that cell phones are pretty inelastic. And there aren't a lot of choices for producers of microchips and other electronics. So they're pretty inelastic as well.

But it's not "cell phones." It's "new cell phones made in China."

I agree that few people will eschew having a cell phone altogether, but most people will be able to lengthen their replacement cycle for getting new phones. And there's a non-trivial portion of the cell industry that's outside of China (we import about 20% of new cell phones from Vietnam). So it's not completely inelastic, especially over any timeframe of more than a year, as production moves in response to the tariffs.

So if Apple wants to continue to sell the same number of iPhones under the new tariffs as before, it can't simply jack up the price by 60%. It will have to eat some of that tariff cost.

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