Wii Console

Wii Console 1. The demand for Wii console will be relative elastic. As from the passage, it mention that “Nintendo announced its first price drops for the console. In Japan, the price dropped from ¥25,000 to ¥20,000 and they sold more than three million Wii consoles also ending 9 months of declining sales”. This shows that that demand for Wii console is elastic as people responded to the price drop and thus they demanded more which also help Wii console to earn back their losses. Also another reason that demand is relatively elastic is that substitution is possible. Substitute such as Microsoft and Sony also produce console, so people will still compare them with Wii console because some is sensitive to the prices, thus some will still buy from Microsoft or Sony because it is cheaper and some of the function is same as Wii, thus demand is relative elastic.

2. The supply for Wii console is relatively inelastic. As from the passage “The UK suffered a widespread shortage of console units as many high-street and online stores were unable to fulfil all pre-orders by Christmas 2006. Some UK stores still had a shortage of consoles by March of the next year”. Which this shows that in a short run, Wii is unable to supply the customer more Wii console to meet the demand. It did not respond to the demand of the customer by stocking up their console, maybe they will be more elastic in a long run, as they might have more time to produce more console. Hence, the equilibrium price for the Wii console is high.

S 3. D Equilibrium price

4. Yes, it is called intentional scarcity where Nintendo purposely produce less Wii console and keep their goods out of stock so as to make it popular. When it produces less, it makes their product more unique and this make