Hans Christian Pedersen
Student ID: 16386421
Word count: 797
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Why are designer denim shorts so expensive?
As the weather has been changing for the better, I have been on a regular shorts hunt recently. Picky as I am, I have been browsing through many shops in order to find the ideal pair to be included in my summer apparel wardrobe. During my search, I stumbled upon something my inner economist found peculiar: the price of so-called ‘designer denim[1] shorts’; many of which lie in a price-range of AUS $150-250(!). Since denim shorts roughly consist of half the amount of fabric that a pair jeans do, one could rationally assume the price would reflect this. Seeing as this is clearly not the case, why exactly is it that designer denim shorts are so expensive?
Many apparently 'obvious' reasons as to why designer clothing is more expensive than the alternative generic brands initially come to mind. Often, I have heard: “designer clothes are equal to prestige and exclusivity”, “they provide a better fit”, “the quality of the materials is higher”, “remember that much time is spend on the innovation and designing process” etc. And while there is most definitely some truth to all of those statements, I would like to argue that other factors also contribute to the price in this case. After all, denim is denim and there is only so much that you can do with the design of shorts.
We are dealing with a standard market. The designer firms wish to make profits (and attempt to maximize these) by delivering goods we want to buy and we, individuals, simply want to maximize our utility. By applying more market theory, the answer to my posed question is simply that the reason these shorts are set at the price they are, is because the consumers’ marginal willingness to pay for them equals or exceeds their value (marginal