Re: MAC - Venomous Villains discussion
Quote:
Originally Posted by AndSparkle
I'm so glad I take Business.
I'm gonna try not to turn this into a business/economics lesson.. but basically:
"When supply and demand are equal (i.e. when the supply function and demand function intersect) the economy is said to be at equilibrium. At this point, the allocation of goods is at its most efficient because the amount of goods being supplied is exactly the same as the amount of goods being demanded."
". Excess Supply
If the price is set too high, excess supply will be created within the economy and there will be allocative inefficiency.
2. Excess Demand
Excess demand is created when price is set below the equilibrium price. Because the price is so low, too many consumers want the good while producers are not making enough of it."
So basically, this would apply to MAC. They need to keep prices at a level where there is enough to create demand but not lower it. By making products restricted, the demand would increase, but the price wouldn't.
|
Quote:
Originally Posted by HerGreyness
lol.. me too... majored in econ -- but then ended up in Finance and Marketing
as the economic theories, while useful, fail in many instances
there can never really be economic equilibrium and this is what makes everything interesting.. you should read Freakonomics
|
Okay...I'm going to go back to my tangent, I'm sorry for cluttering the thread...I guess I'm ASKING for an econ lesson! Sorry...
Ah...so for MAC, since equilibrium is pretty much impossible (I do remember that much from Econ class since nobody can predict the exact supply/demand curve...too many variables involved, right?), companies (especially companies like MAC that make luxury/nonessential goods) want to err on the side of caution regarding supply...since any excess supply means possibly lost money? A small excess demand is better for the company, whereas an excess supply would be to the advantage of the consumer?
Though it seems like since it is a nonperishable (well, more so than some essentials like fresh food--fresh fruit/vegetables/meat/etc.) couldn't they afford a little excess supply? I guess they DO...that's what ends up in the CCOs?
So would this be for all products, or just LE ones? Or just their most popular/most hyped items?
Wow...I kinda wish I had gone into business or something now.