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    So I am a bit baffled as the why adidas were selling the new Yeezy trainers for £200 or something, and they sold out very very quickly and people just put them on ebay for like £800.

    I just don't understand why companies would do this as £200 is cleary not the equilibrium price to sell them at, Nike have done it as well...
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    Maybe at £200 there is excess demand, creating a hype around them and giving more attention to the brand.
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    (Original post by SlimShady96)
    So I am a bit baffled as the why adidas were selling the new Yeezy trainers for £200 or something, and they sold out very very quickly and people just put them on ebay for like £800.

    I just don't understand why companies would do this as £200 is cleary not the equilibrium price to sell them at, Nike have done it as well...
    It must be the equilibrium price. These goods are distinction goods and are very inelastic so they can set the price very high and people will still buy them. They also keep supply low, thats why you have to buy it at stores if you have some kind of token or something.

    Adidas just know how to play around with free market forces and set their prices very high.
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    (Original post by theconfusedman)
    It must be the equilibrium price. These goods are distinction goods and are very inelastic so they can set the price very high and people will still buy them. They also keep supply low, thats why you have to buy it at stores if you have some kind of token or something.

    Adidas just know how to play around with free market forces and set their prices very high.
    I found out they was on sale for 150 and sold out in seconds, my mate sold a pair for 700 the other day.

    I don't understand because its is clearly under supply and they are the company is losing a lot of money, the only thing that does make sense is creating hype around the brand, but there would still be hype if everyone had a pair for 150 and was wearing them, surely that is good hype and advertisement?
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    (Original post by SlimShady96)
    I found out they was on sale for 150 and sold out in seconds, my mate sold a pair for 700 the other day.

    I don't understand because its is clearly under supply and they are the company is losing a lot of money, the only thing that does make sense is creating hype around the brand, but there would still be hype if everyone had a pair for 150 and was wearing them, surely that is good hype and advertisement?
    Yes, it is hyped so it is VERY inelastic. One of the reasons why it is hyped is because of low supply and it is limited, so it is considered very rare and its value is much much higher than it really is. Think of it as an extreme distinction good. I think there is much advertisement, but its more inconspicuous. Its hard to describe and because its Kanye West's brand and at 150, it is the only 'reasonable' priced item in his fashion line, there would be massive hype. Yeezy's are a true showcase of advertising success and it is really down to them setting trends that people feel the need to buy.
 
 
 
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