Superior Donuts — Food Truck Competition

A new food truck sets up shop outside the donut store. The clip starts with the new owner coming by and asking how long the shop has been in business and what kind of customers stop by. She quickly realizes that she can setup shop and steal some of the existing customers. This clip does a really good job showing how monopolistically competitive markets function and that even though an imperfect substitute enters the market, the demand for one business decreases.

 

TIME — Nutella Riots After Price Drop

 

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!

Always Sunny — Circular Flow

Mac and Dennis come up with a plan to create Paddy’s Dollars in order to stimulate their bar’s revenues, but they have the system a bit backward. They decide to give away a bunch of vouchers that could be used to buy beer to local homeless people. Unfortunately, there’s no incentive for those individuals to come back and buy more Paddy’s Dollars later. This would also be a neat example when teaching circular flow diagrams.

Christmas with the Kranks — Hickory Honey Ham

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!

The Real — Thanksgiving Tap Out

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!

Real Husbands of Hollywood — Kevin Needs His Sneakers

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!

Trading Places — Orange Juice Trading

It’s time to short sell the orange juice commodities in Trading Places. Billy and Louis wait for the right price to sell and then hear from the Secretary of Agriculture that the market for oranges won’t be as bad as anticipated so then turn around to buy cheap.

The Hudsucker Proxy — The Hula Hoop

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.

Pixar — One Man Band

 

I use this clip to introduce the concept of monopolistic competition in a market place and how demand shifts when close substitutes enter a market.

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