Price Elasticity Smacks Sony, Blu-Ray, Playstation

Large, brand name companies could often ignore price elasticity because consumers were more willing to pay extra, for certain goods. The average citizen now knows that eventually, prices will go down and except for the early adopters, they will wait for cheaper times. Sony has dropped the price of their 60GB Playstation 3 after Microsoft dropped the price of their XBox 360 model. Electronic companies have realized that although there may not be any real competition (i.e. the iPhone) they were pushing their consumers away with their high prices.

Interaction between buyers and sellers is what helps to determine price elasticity. Consumer reactions to changes in the price of a product, result in an impact towards the quantity of the product that is demanded or supplied. For example, Blu-Ray products have gone down drastically due to the amount of downloaded movies. Substitutes are a major factor in supply and demand. Demand and supply elasticity will help companies estimate the demand of a product if they're price isn't constant.

The internet gives consumers a huge advantage in finding the best product at the best price. I thought this article was extremely helpful because living in a materialistic society requires such knowledge and insight. This article reminded me that although certain products seem like a must have, their prices will eventually be forced down because the demand for electronics quickly falls due to the constant upgrades.

http://industry.bnet.com/technology/1000425/price-elasticity-smacks-sony-blu-ray-playstation/