Christmas, which originated as the celebration of Christ’s
birth, is now primarily about presents and gifts. People often forget the true
nature of Christmas and only think about how many presents they will be
receiving and what they will spend their Christmas money on. Major retailers
use every method they can to try to increase the number of goods sold in their
shop. This includes releasing ‘top 10’ lists of the most popular gifts for
children, which encourages parents to buy these as they do not want to risk
their child having an ‘unfulfilled’ Christmas without the best and latest toy.
The Entertainer, a popular toy shop for children, has
published its list which puts the game Pie Face in the top 10. The game is very
popular with little children as it involves loading a throwing arm with whipped
cream and putting your head through the splash card mask, then taking turns to
twist a handle, hoping that the randomly splatting throwing arm does not splat
you in the face with whipped cream. It all sounds rather messy but as it is already
out of stock it is clearly very popular.
This is a prime example of excess demand, whereby the number
of customers (parents) who wish to purchase the game is greater than the number
of games the shops are supplying.
Currently the out of stock Pie Face game was sold by The Entertainer
for £20. On other websites such as Ebay the very same game is now being sold
for £26 - £31.
This shows a clear example of consumers ‘bidding-up’ the
price in order to get hold of the goods in time for Christmas. The rise in the price
that the consumers are prepared to pay for the goods then incentivises
producers to supply more of this good in order to gain more revenue. This will continue
to happen until the quantity supplied is equal to the quantity demanded and
price equilibrium is reached.
