Wii Case Analysis

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1. The demand for the Wii console is relatively elastic because it has close substitutes which are the PlayStation 3 and Xbox 360 and consumers will tend to shift to others if the price of Wii console increases or if it happens that there is no availability left for it after its first hot lunch. 2. The supply for the Wii console is relatively elastic because the quantity to be supplied is determined through the price. Also in most markets, it is said that time period is considered as determinant of the price elasticity of supply, and for Wii console, it is elastic in the long run that’s also why there is a severe shortage of its supply because it needs to be on over a longer period a firm can build or produce more and more to make wii available to those who want to walk into a retail store and pick one up. 3.

4. The severe shortage for over two years is simply a bad planning on Nintendo’s part for if it’s an intentional scarcity, they would not initiate a price drop by 2009, instead make its price higher with respond to the demand of the consumers who are eager to buy. 5. Nintendo dropped the price of Wii console in late 2009 to attract again more consumers to increase their sales, for based on its shortage for 2 years, they might had a big loss on sales because consumers shifted to Wii consoles’ close substitute which are PlayStation 3 and Xbox 360. And for their revenues, there is an increase again on it as consumers again bought the Wii console with a lower price back again on its worldwide top-grossing product that caused for a more higher earnings.
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