Tag: demand

Jaws – It’s an Eating Machine.

Who wants to swim at a beach with multiple recent shark attacks? In Jaws (1975), Mayor Vaughn knows that if word of the attacks gets out and the beaches shut down, it will cripple the local tourist economy of Amity Island. Tourists will choose other safer places to stay, and businesses will not want to invest in the area if it has become an undesirable vacation spot. If there is a shark terrorizing the local beaches, there is likely to be a decline in consumer and business confidence in the town causing the aggregate demand curve to decline.

Thanks to Amanda Mandzik for the clip submission & summary.

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Air – Creating the Air Jordan

Air tells the story of Nike’s partnership with Michael Jordan and the creation of the Air Jordan brand. Nike beat their competitors in the race to sign Jordan to an endorsement deal by agreeing to a partnership rather than a standard endorsement deal.

In this scene, Matt Damon (Sonny Vaccaro) explains the idea of creating a brand around a player to Mather Maher (Nike Shoe designer Peter Moore). This business model was revolutionary and has been imitated by numerous companies.

Thanks to John Kruggel for the clip and summary!

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Air – The Deal

Air tells the story of Nike’s partnership with Michael Jordan and the creation of the Air Jordan brand. Nike beat their competitors in the race to sign Jordan to an endorsement deal by agreeing to a partnership rather than a standard endorsement deal.

In this clip, Matt Damon (Sonny Vaccaro) negotiates with Viola Davis (Deloris Jordan) over Michael Jordan’s contract. Vaccaro explains that players don’t get to keep a cut of the sales, but Jordan’s mother emphasizes that the Jordan brand will utilize her son’s name, image, and likeness and he deserves to profit from that use.

Thanks to John Kruggel for the clip and summary!

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Christmas with the Kranks — Christmas Tree Demand

The Kranks are (initially) planning to skip Christmas this year, which means their demand for Christmas trees decreases. When their daughter announces that she’ll be back home for Christmas, the Kranks scramble to try and find a tree. Unfortunately for Luther, there aren’t many trees available because it’s so close to the holidays and he ends up paying full price (instead of a discounted price) for a pathetic tree. When decision-makers don’t have much time to make a purchase (like Luther right before Christmas), their demand is fairly inelastic.

Thanks to Mandy Mandzik for the clip recommendation. Check out her working paper, All I Want for Christmas is an A on My Econ Final: A Holiday-Themed Review Class, for more Christmas-themed economics examples.

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60 Minutes — Changing Preferences

One of the common shifters of demand is changing tastes/preferences, but that is often taught as something beyond the control of firms. It’s often associated with fads or maybe new research, but firms can also adjust the tastes of their products to induce new preferences. This 60 Minutes segment looks at how companies are changing demand for their products by directly changing the product, or at least the perception of their product.

Thanks to John Kruggle for the submission!

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Futurama — A Can of Old Fish

The gang heads to get some pizza and Fry wants his friends to experience anchovies, a type of small, salted fish. It turns out that these small fish were overfished and the population collapsed. Zoidberg even mentions how sorry he was that his people kept consuming them because they didn’t realize they were a common resource, subject to the tragedy of the commons.

Fry is incredibly rich, and wishes he could bring them back. He at first notes that even incredibly wealthy people aren’t able to purchase everything. At an auction, he finds that there is exactly one can left in the known universe and decides to bid all of his money for the “can of old fish”

While we normally wouldn’t pass judgement on someone’s preferences, it’s hard not to believe that this could a good example of a winner’s curse. Fry’s willingness to pay for the can of fish may not be $50 million, but the utility from winning the auction could be worth that.

Thanks to Jessica Pritchard for the clip suggestion!

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Schitt’s Creek — Christmas Demand & Price Discrimination

The Roses are trying to buy a last-minute Christmas tree, but they’ve come to realize their options are limited. The shop owner knows demand has recently been higher because there aren’t a lot of trees available in the store. Raymond finds that the prices are higher than he was expecting and decides to leave.

The shop owner takes a few creative approaches to selling trees, including bundling air fresheners with purchase and offering a discount if people buy two trees. Price discrimination is a popular tool to increase output for a firm and sell products to people across the demand curve.

Thanks to James Tierney for the submission:

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Le Trèfle Paper — Emma

The digital revolution can replace a lot of items that traditional paper was used for, liking color pages, sticky notes, books, or puzzles, but it can’t replace toilet paper. Substitute goods are at the discretion of the consumers with some items being “perfect substitutes” and others being some gradient of substitutes. Digital toilet paper isn’t a very good substitute for the real stuff.

Thanks to Dr. Michele Pickett for the clip!

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Popeyes — Quantity vs Quality

Popeye’s argues that economics can’t explain why their chicken tastes so good. The professor looks at the inverse relationship between quality and quantity, so maybe this is actually a marketing class?

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