Homer forgets its Valentine’s Day so he has to rush off to the Kwik-E-Mart to pick up a last minute gift. Seeing that Home is desperate, Apu takes the chance to raise the price on a box of chocolates to $100. Despite Homer’s annoyance, he pays the higher price because he knows he’ll be in trouble if he comes back empty handed. After threatening never to shop their again, Apu offers him a discount on other products to keep him from shopping next door.
One way that companies can reduce supply without customers realizing it is by changing the size of the packaging. This actually makes the per unit price higher, which matches with the theory of decreasing supply. This decrease in supply could come from changes in input prices or perhaps shifts in agricultural markets, like freezes in Florida and oranges.
A few supermarkets in France decided to cut the price of Nutella (an extremely popular item throughout Europe) by 70% and customers responded in droves to scoop up the heavily discounted staple. Police were called to various markets as customers fought to get the remaining jars. Not only is this a great example for demand shifts, but it’s an even better topic of elasticity!
While trying to spy on a local fish accident, Dee has an accident that causes the business to shut down for a bit. This reduction in supply is shown later when Dennis, Mac, and Charlie go to a restaurant for lunch and intend to order fish. Because of the reduction in supply, the market price for snapper has gone up to $44, but the guys buy the fish anyway since they are charging it to Frank’s card.
Thanks to Maggie Sciabica for the reference!
This scene is from the movie Christmas with the Kranks involves a specific type of ham that has been sold out and Mrs. Krank needs one because it’s Christmas Eve and her daughter flew in for Christmas. She pays above the sticker price of the ham because it was the last one available in the store. Because there is only one ham left and it doesn’t matter how much the ham costs, Mrs. Krank will buy it. This means that Mrs. Krank’s elasticity for hickory honey ham is very inelastic.
Thanks to Salvatore Pollastro for the summary and the clip!
Turtle and Drama search for a new apartment, but Johnny isn’t a very good negotiator. The real estate agent doesn’t seem interested in budging and pushes Drama above his original budget.
Guest co-host, Ashanti, mentions that expensive flights during Thanksgiving should be “tapped out” because a lot of people need to be with their families during Thanksgiving. This relates to the concept of demand and supply because the airlines know that when it is close to Thanksgiving, the demand for flights increases, and since most people are eager to be with their families, they are rather inelastic to the price change, so the firms take advantage of this and raise the price of the tickets drastically in order to increase their total revenue.
Thanks for the clip and summary Tammy Georgewill!
Kevin needs to get a pair of sneakers for his son, but only Nick has any around. Even though he hates Nick, he feels like he needs to pay big money in order to secure a pair for his son. By choosing to limit the number of shoes available, a shortage exists for the sneakers. Only toward the end do we learn that a black market dealer may have access to another pair of shoes.
Thanks to Ryan Welch for the clip!
This is a clip from the movie “The Hudsucker Proxy” (1994). In the scene, the store owner have a hard time selling the Hula Hoop. He kept lower the price but still no one wants to buy the Hula Hoop even he end up giving them for free with any purchase. He then throw all them out of the store and one of them accidentally bump into a boy. The boy start playing with it and the other kids saw it. After that, they all run to the store for the Hula Hoop. As more and more kids tried to buy a Hula Hoop, the price goes up again and even higher than before.
This related to the idea of demand and supply. At first, the Hula Hoop was not popular for kids so there’s no one wants to buy it. However, after the kids saw the boy playing with it, their preference change. Preference can change the demand of a product. When the demand increase, the price of the product and the supply also increase.
Thanks for the clip and summary Yi Chun Liu.