Posted by
Georgiaboy on Friday, November 17, 2006 8:28:38 PM
My brothers and I camped out to get a Playstation 3 video game console last night. We were lucky enough to win a raffle that got us our place in line and we scored one of the most coveted items this Christmas season. Needless to say it was pretty exciting. We had been planning on getting some PS3's for almost a year in order to sell them on Ebay during the inevitable launch shortage.
Right now there are about 15-20 people who want a PS3 for every available console. The XBOX 360 encountered the same initial shortage when it launched. The reason I bring this up is because it perfectly illustrates a fundamental economic truth--supply and demand. The supply of PS3 is very low, around 400,000. The demand is very high, around 20 million people own PS2s. Therefore the price is guaranteed to be high.
Ebay is where the free market comes in. For a number of reasons, Sony is selling their PS3's for well below their fair market value right now. Xbox did the exact same thing. But, the markets responded to this unatural pricing though Ebay. The majority of people in line to buy PS3's in America are all planning on selling them on Ebay. And now on ebay, PS3s are selling at $3000 to $7500. The market has worked its magic. Despite the initial pricing, the PS3 shot up to its real value. Instead of shortage, anyone who really wants a PS3 can get one--they just have to have lots of money. And best of all, it drives liberals crazy because they think that people on Ebay are PRICE GOUGING.
Well, they are not. The price they are selling the PS3 for includes labor cost from them sitting in the cold in your place in order to get a console, their profit as middle men, and the true value of a scarce commodity. It is the free market at its beautiful best and I love it.