This peculiar circumstance is part of rising modern trend within high end fashion. The aim of this essay …show more content…
Fixed supply is a term referring to a situation in which supply is independent of the price level. This means that no matter what price charged, the same supply will be produced and released. The way the Yeezy boost 350 is released is through what is known as a “drop”; a supply schedule where the suppliers release a fixed number of a product to a select few stores at a set price, selling them through a first come first served basis. This is a popular method used by high end streetwear brands like Supreme and Palace. The goal of this is to achieve a sense of exclusivity, which eludes to a denotation of luxury. This idea of exclusivity can also be witnessed when Kanye released his 2016 album; “The Life of Pablo”, only on the Tidal streaming service for several months. This meant that at the time the only way to legally access the album was through purchase of a Tidal account. This concept of exclusivity can be linked to further ideas that lead to the high demand and high resell prices explored later in this essay. In the case of the Yeezy Boost 350, each “drop” was limited to a total 40,000 pairs of shoes. In addition to this, the supply is fixed meaning that supply is completely independent of the price variable. The result is that algebraically the supply function for the shoes would not have any price variable in it. With a fixed supply of 40,000 pairs …show more content…
This is a common strategy in competitive markets, and the aim of this is to also achieve a greater degree of Price inelasticity of demand. A famous example of this strategy is when Sony maintained low prices during the release of the PlayStation 3 in 2006 to such a degree that it sold the console at a loss of $241 (PC World, 2006). Whilst a very feasible reason for the low prices, this is highly improbable due to two main factors. Firstly, it is evident from the fixed supply and the inelastic demand that the low prices do not result in more sales. Therefore the