why do technology prices drop?

I've never understood why, only accepted it as something that just happens.

Why does it happen? Does it depend on each specific technology?
Is there a good chance that it will keep happening for the forseeable future? Is it anything to do with moore's law?

StevenH said:

Is it anything to do with moore's law?

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Sods law more like.

Hazzastar said:

Sods law more like.

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Ha

It actually has everything to do with Moore's Law.

Here's the statement itself. "The complexity for minimum component costs has increased at a rate of roughly a factor of two per year ... Certainly over the short term this rate can be expected to continue, if not to increase. Over the longer term, the rate of increase is a bit more uncertain, although there is no reason to believe it will not remain nearly constant for at least 10 years. That means by 1975, the number of components per integrated circuit for minimum cost will be 65,000. I believe that such a large circuit can be built on a single wafer."

You'll notice that cost is directly mentioned in his statement. Essentially bang for the buck doubles every 2 years.

It also has a lot to do with economics. The market is usually flooded with the newest coolest gadget that most people can't afford. In order to sell the overstock, the price must go down. Pretty simple.

Yep marketing at its worst. If its new charge as much as you can get as many will absolutely demand it to be in front of those poor Jones'. When sales fall away, reduce the price.

Economic issue of supply and demand.

New means marketing, production costs, ect. As they get older, or more produced, the need for marketing drops, efficiency in production, cheaper materials all help to lower the cost.