theprof00 said:
have you taken economics? EDIT: Difference in price variation literally means that demand is higher. I would even argue that ps4 price would be higher! But the substitue item is priced at 600. This, according to price elasticity of demand, means that at 600$ the price becomes inelastic, and demand drops. |
You've got your terminology all wrong.
Price Elasticity of demand is a formula meant to be used for a single product, to see if it's prices are elastic. (Which they pretty much never are.)
Additionally, for the formula you need to have number sold.
That there is higher demand on secondary sites does suggest there is more demand though.
HOWEVER, there are MANY caveats...
1) Supply for one, since more supply is going to make the multiplier lower. I haven't been paying attention to sales, and don't plan to until supply constraints are over, so i don't know which one has sold more. One factor that may affect this though is that the Xone has launched in less territories correct?
So demand from those countries might end up lower due to supply being in those countries only. If you split up 1,000 consoles between Japan in the US. Japan demand is going to be higher then if you put all 1,000 in Japan.
2)Since we're talking about internet pricing, a big one is internet savy of the consumer bases.
3) Inherent price ceiling - Both are at 600+ maybe that's just what the price ceiling is. No matter how in demand gum is, at some point it's got an absolute cap on the secondary market. This holds true for all items.
4) Other demographic differences. Enthusiasm is a big part of it. If you had two equal groups, but one had a more "extreme" base, or even a richer base, that would effect the price difference.
