| Adinnieken said: Quanity = Quanity Supplied. In otherwords, the ability of Sony to supply retailers consoles is Quanity. Supply is the willingness of either the manufacturer or the retailer to supply an item at a paricular price. Likewise, Demand in the above curve is the willingness of buyers to buy an item at a particular price level. The Equilibrium point is where buyers will buy at the price level, and manufacturers are willing to sell at that price level. If there is a shortage in Quanitity supplied, then the Supply curve moves inward, and the Equilibrium price increases. If there overage in Quanity supplied, then the Supply curve moves outward, and the Equilibrium price decreases. If there was a true shortage, the price for the PS4 would increase because demand would outstrip supply, retailers would see an opportunity and increase the price. |
You're only partially right, in that typically increased demand vs supply will increase prices. But the catch is that this only items with prices that are dynamic adjust to the market. Console are fairly static in price, dropping relatively few times comparitevely. Supply and demand does occur on resale sites like ebay and amazon, but the very second a retailer raises thier price because of supply issues, it will be undersold by every other vender.
Also FYI, the econ you study in school and the econ that drives the real world aren't exactly identical ;O
For example, regardless of avaliability, from last year to launch the official price of the PS4 was 400$, meanwhile the the PS4 on ebay could be found any where from 500 dollars to 800 because of resellers.
In this day and age, with the Internet, ignorance is a choice! And they're still choosing Ignorance! - Dr. Filthy Frank
