commissioner.org
| Source | D. Ohmans |
| Date | 01/11/16/15:53 |
| Extra credit:
I decided to compare the market of the Harry Potter book series and the miscellaneous merchandise associated with the series. I forsee that the revenue will probably drop as in all book series, but the revenues will go up and down as new readers come of age to enjoy and understand the books. First off the supply of the amount of books published to the demand is a direct relationship. Of course the price to the quantity is an inverse relationship. Now that the movie is coming out, the demand has shifted forward with the price staying constant on the 1st book published, which the movie is based on. Since the 1st book came out it has been on the NY Times best seller list for 152 weeks, staying in the top 10, sliding down when when another book from the series is released, but has now moved up into the 2nd slot again. The supply has also shifted forward with the price staying constant. There has been no simultaneuos shift because the price has remained constant with every book released. The marginal ulitity continues to go up with every new book in the series read, however the marginal utility does go down as a person re-reads the same book due to knowing the outcome. I believe the price of elasticity could almost be considered inelastic for some, because as each book is read the anticipation for the next book in the series is very high and those die hard fans would pay almost any cost in order to read the next book. Take for instance, the forth book had stipulations on the release date, there could be no early release, people stood in line at mid-night on July 15, in order to be the first one to read the new book. Over 250,000 copies were presold. The demand is also inelastic, because there is no other series that takes the place, and the series is limited to only 4 books released out of the seven in the series. The profits on this series has been phenomenal. So far 21 million copies of the series have been sold since the 1st one was released in 1998. The 1st book was bought for $500,00 by Scholastic books, and has already made $1 billion in revenue. They are even picking up some of the consumer suplus by offering paperback books at lower prices, some have gold edged pages that sell at a higher price, and some with the authors signature sell for even higher prices.I believe it is the 1st printed editions of each book with the authors signature sells for $50,000. This book series is a monopoly with in itself, because ther are no close substitutes. However the prices of the books along with the merchandise are comparable in price with other similar products, but I believe they could increase the price of many of the items and would still make a fairly large profit. With the movie coming out, the quantity of seats available is completely inelastic, it is held constant. In order to assure a seat for the opening day to the public many people had to go on line, pay an additional handling fee of $2.00, so the extra revenue from this can fall into economic rent. Therefore the supply will continue to increase as the demand increases until the last book in the series is released, it should then start to flaten out, with an occasional increase now and then for reasons stated in the beginning. Joyce Gallegos Saturdays |
Copyright (c) 1998, Joongpil Cho