Rule of Supply and Demand...debunked?

I've always had problem accepting this as a given. To me it's always been more about "greed" than natural consequence. I feel safe in stating this by giving this example;

The Nintendo Wii, when it was first marketed it was priced at 250.00. And you know even after it was near impossible to find one in stores and even online the base price for said object remained 250.00. Now of course the consumer could have chosen to pay more from a "third" middle man but that was by choice, not because the manufacture or even the primary distributors increased the price. Meaning with patience and good timing you could buy the product at this price.

So am I wrong? Does this example reveal the stated law as being not natural consequence but an expression of basic greed?

Not sure what you mean.

Supply and demand are basics for any business. And it is a rule for successful business.
If you have supply but no demand, you'll go out of business.
If you have demand but no supply, you'll go out of business since people will go to competitor who will provide supply for the overwhelming demand.

Originally posted by Gadabout
I've always had problem accepting this as a given. To me it's always been more about "greed" than natural consequence. I feel safe in stating this by giving this example;

The Nintendo Wii, when it was first marketed it was priced at 250.00. And you know even after it was near impossible to find one in stores and even online the base price for said object remained 250.00. Now of course the consumer could have chosen to pay more from a "third" middle man but that was by choice, not because the manufacture or even the primary distributors increased the price. Meaning with patience and good timing you could buy the product at this price.

So am I wrong? Does this example reveal the stated law as being not natural consequence but an expression of basic greed?

You kinda ****ed yourself in the ass with that example, sir.

If it's hard to find a Wii, it stands to reason that the demand is still high and the supply-side can't meet it or is meeting it at a make-per-sale basis, ergo, why the price hasn't dropped, it's still in demand and there isn't a surplus.

I would try to act smart and post an insightful reply --- but I got a C in Macro Economics.

Originally posted by Blinky
I would try to act smart and post an insightful reply --- but I got a C in Macro Economics.

“The 'C' students run the world.” - Harry S. Truman

I'm just saying that it seems to me the the rule of supply and demand as it is taught would neccessitate an increase in price of an item simply because it's in high demand, meaning "look i got this thing that you want".

Of course I could be wrong....just talkin yaw

Logically, there's going to be a limit on how high you can set the price, regardless of demand.

The model of supply and demand is not an absolute and not fully or even at all applicable in every type of market

Originally posted by Bardock42
The model of supply and demand is not an absolute and not fully or even at all applicable in every type of market

Well thank ****ing you, Mr. Joseph E. Stiglitz.

Welcome

Originally posted by Robtard
Logically, there's going to be a limit on how high you can set the price, regardless of demand.

That would be nice if it were true.

Originally posted by Gadabout
I'm just saying that it seems to me the the rule of supply and demand as it is taught would neccessitate an increase in price of an item simply because it's in high demand, meaning "look i got this thing that you want".

Of course I could be wrong....just talkin yaw

not for a product like the Wii. There is a set limit to how much people are willing to pay for a piece of "entertainment hardware" that interacts with how much they expect to get out of the device.

Any more money, and the lack of media functionality for the Wii would be a serious drawback. There is also the marketshare issue. The Wii was designed for people who were not already buying the 360 or the ps3 (primarilly), as Nintendo knows it is futile to try and be the third guy in that race. By having a less functional and less expensive product, they actually create more demand. Raising the price would lower demand.

The wii is even more interesting, as for months, if not years, after the initial release, Nintendo was creating an artificial scarcity of the product to drive demand as high as they could. Had they made the product widely available, people would have expected price cuts and other things, which would have lowered demand (lets call it the "I'll buy it later" effect). By making people think it is very hard to come by, you increase the demand for the product.

If anything, the Wii is textbook supply v demand, just more that Nintendo manipulated the market and their product launch in such a way that demand was maximized.

The fact you say it is under priced (ie: people could charge more for it) also increases demand. People think they get the best value when purchasing the Wii.

Originally posted by Robtard
“The 'C' students run the world.” - Harry S. Truman

ha, I'll try that on my grad entrance exams

Originally posted by jinXed by JaNx
That would be nice if it were true.

There's obvious exceptions to the rule, but it generally is so.

When the PS3 cane out(to use another gaming system), prices started to skyrocket, as the supply did not meet the demand and people where selling their systems on Ebay for 2+ times the price, but logically, they couldn't start asking $75,000.00, no matter the demand as no one is going to pay that.

What's intresting to see is Digital Distribution.

Now THAT breaks Supply and Demand seeing as you have practically infinit supply. You then you start to see how pricing items (Games, music) at full price makes absolutly NO sense.

Why?

Simple, you don't ahve to pay for the printing (CDs, DVDs, Boxes, Papers) and Distribution. The Companies cut out the middle man (HMV' EBGames, what have you not) and makes a Heck of a lot more profit.

Yet the user has to pay full price.

p;p;pp