Point of diminishing returns

if the value in use equals the value in exchange, there is no point of diminishing returns.

as price increases, there is some point when the value in exchange exceeds the value in use.

another words, someone will continue to pay more and more for a component until he/she perceives that a component is overpriced.

there is no absolute number. for some a $2000 preamp is the point of diminishing returns, while for others it may be $5000. in any case, it is subjective.

for the mathematicians out there when the rate of change of value with respect to the rate of change of price begins to decrease, the point of diminishing returns is reached.

there is no absolute answer.

also, someone may be willing to upgrade , paying 50 % more in price to get a 10 % improvement, because it is worth it to that person.

Some years ago, I saw a graph on the relationship of dollars spent to sonic improvement in speakers. Every dollar spent yielded a straight vertical improvement in sound, up to $1200.00, where the graph started to curve, showing less and less sonic improvement per dollar spent. You still got improvement, just less and less per dollar.

When you wife says "If were ever get a divorce, I'm keeping this stuff" that is the point of diminishing returns.

when your divorce attorney asks to see your financial statements <(:{

Macrojack,

Most of the responses seem to have addressed the theory of diminishing returns, but you asked about point of diminishing returns. Imagine a plot of goodness as a function of cost. Assuming you have a metric for goodness -- the great devil for audiophilia, at some point the resulting curve will reach asymptot, goodness will cease to rise in direct proportion, or even substantially, with cost. That's the point of diminishing returns. For some audiophiles, cost and the concommitant bragging rights are intertwined, so their sense of goodness rises in lock step with cost. For them, a point of diminishing returns will not exist. Same is true with collecting, where the metric is rarity and rarity usually corresponds to cost.

db