Supply and Demand

   When PlayStation 3 was first released in Japan during 2006, the quantity demanded for the game console was crazy! It was said that soon after the PS3 system was released, almost 80,000 of them were sold within 24 hours. The demand for PS3 game console was so high that the customer who preordered it got huge disappointments due to the limited supply of consoles available. When the consumers are willing to purchase more than the producer able to supply, this resulted in shortages.

  

   To illustrate the example, the price for PS3 game console is constant and does not meet the market equilibrium, so it causes the quantity demanded (QD) for PS3 game console is more than the quantity supplied (QS).

PlayStation 3

Nintendo Wii

Although the price is already as high as thousand ringgits for each PS3, but people seems to be quite unresponsive towards the price. So, what causes the demand for PS3 to reach so high? Simply it is the trend for teenagers to own a PS3 these days. Compared to Nintendo Wii, although the price of Wii is cheaper, but the quality of PS3 is much better than Wii in terms of high definition of graphic, Blu-ray player and can be played via online. 

 

  My opinion would be the firm should increase the price of PS3 to reach the market equilibrium in order to get rid of shortage. When the price is increase, from P₁ to P₂, the quantity demanded for PS3 will decrease, the quantity supply will increase and meet at the market equilibrium, Q.

Resources:
<http://www.streetdirectory.com/travel_guide/103720/gaming/the_playstation_3_supply_and_demand.htm>
<http://www.talktalk.co.uk/games/features/wii-vs-ps3-vs-xbox360.html>