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PlayStation 4

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Portia Porter

on 9 September 2014

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Transcript of PlayStation 4

PlayStation 4

Demand Curve
Three reasons: why the demand curve will shift
(non-price determinants)

1. A glitch that gives out your information (demand goes down, non-price)
2. Free PlayStation Plus for up to a year (goes up, non-price)
3.) Xbox One comes out with a lower price (demand goes down, non-price)

Is it elastic or inelastic?
The PS4 is elastic. It is a luxury therefore people will not be as willing to pay more for what they do not need.
Since November of its release, the Playstation 4 has been selling at a rapid pace. On the release date, one million consoles were distributed. Unfortunately, this also had an effect on the available supply of the popular console.
Supply Curve
Free PlayStation Plus for up to a year.
Demand goes up
Xbox One comes out with a lower price.
Demand goes down
The price of the PlayStation 4 has been the same throughout its lifetime. Because the price is 20% less than the Xbox One the sales of the PS4 have out sold 3:1. The excitement of the launch and the holidays have passed, and almost half of the PS4 sales have occurred in its first 6 weeks of availability. Although sales are still strong, it has taken 9 months to sell the second half of its sales.
Sony has been unable to keep level with the demand (non-price)

Restricted supply may remain this way until the summer of 2014 (non-price. supply goes down)

Price increases by $400 (price determinant.) supply goes
The product is elastic, because it is a luxury rather than a necessity. It is relatively easy to make more of the console. Consumers may have been more willing to buy if price only increased slightly, but the raise will discourage some from buying.
elastic or Inelastic
three reasons why supply curve
will shift (non-price determinants)
We think the PS4 has a fair price already. $400 for a new console is a normal starting price.
Full transcript