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In Reply to: RE: your graph is wrong posted by Sumflow on June 12, 2012 at 22:04:58
I'm talking about quality.
"Negative gain per dollar after the X point for sure."
What your graph implied was that the more $ you throw at something (in this case a DAC), at some point, X, the quality will begin to decrease. That's not right.
Maybe you're taking a business approach and talking about ROI. That would be an entirely different issue and my comments had nothing to do with that context.
"adding more of one factor of production, while holding all others constant"
A DAC is not just a D-A converter (ie, a chip) -- it is a system (chips, power supplies, filters, caps, resistors, etc). Why would anyone confine themselves to improving only one part of a system and expect the entire system to reach its maximum potential?
Business approach again?
Follow Ups:

Joe what you are saying is correct. What the graph was suppose to implie was that the more $ you throw at something (in this case a DAC), at some point, X, the quality gained per dollar will begin to decrease.
Most of us do not have unlimited funds to spend just on audio. If we have an eye to the most quality we can get for a specific amount of resources. Then we can decide whether the next purchase is worth it.
The point of diminishing returns is when the next dollar spent gives less of an increase in quality than the previous dollar did. ie: rate of change of return per dollar.
~~~
Our lunacies have been indulged up till now..

Without unlimited funds each of us has to find the spot.
~~~
Our lunacies have been indulged up till now..
.
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