Economies of scale

I love logging in to the Warcraft remote auction house and seeing that an item I have has been sold out. It is like a free pass to determine the pricing for that item for the next day, week, month, however long it takes people to push down the price. Unless, like last week, I put a Glyph of Sap into the AH for a respectable 25g, and less than an hour later someone overloaded the Auction with them at less than a gold each. I’m still waiting for that price to recover, it has only made it back up to 8g and sales have not increased from the decreased price…..what is the lesson here(I'm getting to my point soon)? Most people playing Warcraft have never studied economics. Meeting 100% of demand doesn’t mean you are earning the highest profit margin. If 100% of people who want item 'A' will buy it at $25, why would you bother selling it at $0.25?

 

Now let’s apply this concept to Kinect. If you can’t keep them on the shelves at $150 per unit, maybe you should have sold them at $175 a unit, if you couldn’t keep them on the shelves at that price, why not bump up the price further and sell them for $200? So, if you aren’t willing to pay $150 for Kinect, I can promise you someone else will be.

 

I personally love my Kinect, and can’t wait to get my TV fixed so I can go back to using it.

 

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