Clearly Intel has been ahead for so long, that was "normal", but now AMD is back in the game in a serious way. Intel is smart to respond.
You're completely missing the point. Normal for Intel is keeping prices high even when they don't have the performance compared to the competition to keep prices high. It's extremely rare for Intel to drop prices much less slash them like this. The point I'm making is they can do this because Intel will usually have something coming out which will "justify" the higher prices because the new product will again be worth the high price. The fact that Intel is slashing prices is a strong indicator that Intel will have nothing out soon to compete and justify the higher prices.