thats what the economics textbook says, but it also says that all parties in the economy are perfectly rational. however this is not the reality. they have tested it, people are already used to the high prices and they have no problem with it, enough of them will buy it anyway. the price drops from completely unaffordable 7x price to barely affordable 4x price, and people are already buying it again. if they aim for 4x price, they only need the quarter of the former sales to make the same profit. and if at 4x price the sales are the quarter of former sales, they could theoretically shut down most factories or production lines to reduce costs and in turn raise profits even more.

I thought of the problem is they aren't ramping up production because they think AI is a bubble

That prices will go back down.